Franchise and Agency Dispute Mediation Now Available in Busan

Chairman Seongwook Cho of the Korea Fair Trade Commission. / Photo by Honam Moon munonam@

[Asia Economy Reporter Moon Chaeseok] Following the Seoul metropolitan area, Busan City has gained the authority to directly mediate disputes related to franchises and dealerships.

On the afternoon of the 10th, the Fair Trade Commission announced that it would sign a business transfer agreement with Busan City for dispute mediation in the franchise and dealership sectors, as well as the registration of information disclosure documents for franchise businesses.

Busan City will take over these duties starting from the 1st of next month. It is the first local government outside the Seoul metropolitan area, including Seoul, Gyeonggi, and Incheon.

From the 1st of next month, Busan City plans to carry out franchise business information disclosure registration tasks and establish and operate a Franchise and Dealership Dispute Mediation Council. The council will have the same legal authority as the Fair Trade Mediation Agency.

After the agreement, Busan City will have the authority to notify the Fair Trade Commission if complaints about unfair trade practices are received in franchise, dealership, distribution, or subcontracting transactions.

To facilitate the establishment of the council and the registration of information disclosure documents, Busan City will receive education and support from the Fair Trade Commission and, if necessary, conduct on-site investigations together with the commission.

Busan City and the Fair Trade Commission also plan to declare a collaborative system to eradicate unfair practices along with the business transfer. They agreed to eliminate unfair trade that may arise between franchise headquarters and store owners, as well as between dealership headquarters and store owners, and to devise win-win solutions.

Chairman Cho Sung-wook of the Fair Trade Commission said, "This is a historic occasion as dispute mediation duties are being introduced for the first time outside the Seoul metropolitan area." He added, "Recently, due to the spread of the coronavirus, the franchise and dealership sectors may face difficulties such as delayed payments and supply disruptions. If related disputes are reported, I hope they will be prioritized not only by Seoul, Gyeonggi, Incheon, and the Mediation Agency, which are already handling dispute mediation, but also by Busan."

Mayor Oh Keo-don of Busan emphasized, "Eradicating various unfair practices arising in the franchise and dealership sectors and establishing a fair market economy order is an important task that local governments must undertake in the era of decentralization."

The Fair Trade Commission expressed its intention to make the collaboration with the local government in Busan, following the metropolitan area, a successful case and to expand the foundation of fair trade to other local governments as well.

This content was produced with the assistance of AI translation services.