Joo Byung-ki: "The requirements for collective bargaining by franchisees were excessive... We will revise them"

[Financial News] Joo Byung-ki, Chairperson of the Korea Fair Trade Commission, said some of the requirements in the enforcement decree for the Fair Transactions in Franchise Business Act, which strengthens the bargaining rights of franchisee groups, were set too high and that they will be revised.
When Democratic Party of Korea lawmaker Lee Kang-il pointed out the group-formation requirements in the draft decree on the 24th, Joo said, "It seems we may have been overly strict in setting the range from 30 to 300," adding, "We will also take sufficient account of the need for mutual growth."
The revised Fair Transactions in Franchise Business Act, which passed the National Assembly in December last year, is designed to allow franchisee groups to request consultations with franchise headquarters over changes to transaction terms and other matters. It legally guarantees a channel for franchisees to speak with franchise headquarters through collective groups. The enforcement decree sets the detailed requirements needed for group formation and requests for negotiations so that the law can work in practice.
Under the plan, the KFTC would allow groups to register if at least 10% of franchisees, or 1,000 people or more, join, while also setting a minimum threshold of at least 30 members. It also bars requests for renewed consultations on the same issue for 180 days after negotiations conclude.
Lee said these requirements could weaken the intent of the parent law. He argued that applying the 30-member minimum, which would affect more than 88% of all franchise headquarters, could make it difficult for many franchisee groups to exercise their bargaining rights. He also said the purpose of the revision could be undermined if franchise headquarters still have room to refuse negotiations altogether.
The issue of franchise headquarters refusing negotiation requests themselves was also raised. Lee said, "Out of 32 requests for negotiations, 31 were rejected," adding, "The purpose of the revision is to have the talks themselves." He explained that the law is not meant to force an agreement with franchise headquarters, but to ensure they sit down at the table first when franchisees make a request. Joo responded, "We will review it carefully and listen to opinions."
Lee also called for a review of the rule restricting renewed consultations for 180 days after talks end, the requirements applied to large franchise headquarters with more than 1,000 stores, and provisions limiting the authority of proxies such as franchise transaction specialists. Joo said of each provision, "We will review whether there is room for abuse."

[email protected] Kim Chan-mi Reporter