[Asia Exclusive] Introduction of 'Dispute Resolution System' Between Franchise Headquarters and Business Operators, Annual Reports Decreasing

Responsible for Fair Trade Commission Dispute Mediation for 9 Years

Leading Voluntary Resolution through Direct Dialogue

Yeom Gyu-seok, Executive Vice President of the Korea Convenience Store Industry Association. / Photo by Hyunmin Kim kimhyun81@

[Asia Economy Reporter Lim Hye-seon] "A self-regulatory function is necessary to create a healthy ecosystem in the convenience store industry."

Yeom Gyu-seok, Vice Chairman of the Korea Convenience Store Industry Association, transferred to the Convenience Store Association in 2013 after having worked for nine years at the Fair Trade Commission handling dispute mediation. Based on his experience, he introduced a dispute mediation system between franchisors and franchisees. The idea was that if franchisors and franchisees resolve disputes autonomously through direct dialogue and negotiation before the Fair Trade Commission intervenes, trust for win-win cooperation can be established.

Vice Chairman Yeom referred to the U.S. DRB system when introducing the dispute mediation system. The DRB (Dispute Review Board) was first introduced in 1975 during the Eisenhower Tunnel construction project in Colorado, USA. From the start of construction, a dispute resolution committee is formed mainly with representatives from the client, contractor, designer, and subcontractors to handle disputes arising during the construction process.

While serving as the Head of the Dispute Mediation Office at the Korea Fair Trade Mediation Agency, Vice Chairman Yeom studied the DRB system to improve unfair subcontracting disputes, which had the highest number of mediation cases. After moving to the Convenience Store Association, he applied the DRB system to the convenience store industry.

Starting with CU's 'Voluntary Dispute Mediation Center' in July 2013, Ministop introduced the 'Voluntary Dispute Mediation Council' in October of the same year. In 2014, Seven Eleven and GS25 each established the 'Voluntary Mediation Resolution Center' and the 'Win-Win Development Committee,' respectively. These voluntary dispute mediation bodies are composed of 3 to 7 members, including an external expert as chairman, representatives from the franchisor, and franchisee representatives.

Since the introduction of the dispute mediation system, the number of convenience store dispute mediation cases reported to the Fair Trade Commission has decreased. The number of dispute mediation applications in convenience stores dropped from 151 cases in 2013 to 105 in 2014 and 44 in 2015.

Vice Chairman Yeom said, "The franchisee councils and franchisors have a strong willingness to understand each other's positions and resolve issues," adding, "The positive effect on the entire industry is significant." This year, he plans to work on improving unreasonable regulations that hinder the growth of the convenience store industry.

◆ Career

▲ Born in 1965

▲ Graduated with a Bachelor of Laws from Kyungpook National University in 1990

▲ Earned a Master’s and Doctorate in Law from Kyungpook National University in 1998

▲ 2003 Secretary General of the Franchise Business Transaction Dispute Mediation Council at the Fair Trade Commission

▲ 2008 Head of the Dispute Mediation Office at the Korea Fair Trade Mediation Agency

▲ 2013 Full-time Vice Chairman of the Korea Convenience Store Industry Association, Vice Chairman of the Korea Distribution Law Association

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