Government to Invest 208 Billion KRW This Year for Franchise Innovation and Win-Win Growth, Sustained Over 5 Years

'Franchise Industry Win-Win Council' Launch Ceremony
Announcement of the '3rd Basic Plan for Franchise Business Promotion (2021~2025)'

Creation of Innovative Services · Training of Professionals, etc.
Biannual 'Franchise Expo' to be Held
Amendment of Franchise Business Act to Introduce 'Prior Consent System' for Advertising and Promotional Events

[Sejong=Asia Economy Reporter Joo Sang-don] The government has decided to invest a budget of 208 billion KRW this year to innovate the franchise business and establish a foundation for win-win cooperation, with continuous investment planned over the next five years. Along with creating new services through the smartification of franchise stores using new technologies such as the Internet of Things (IoT) and Augmented Reality (AR), the government will also focus on training professionals to strengthen the self-sustainability of franchise business operators. Additionally, to help discover and nurture promising franchises, a biannual 'Franchise Expo' will be held.

On the 26th, the Ministry of Trade, Industry and Energy held the launch ceremony of the 'Franchise Industry Win-Win Council' at the Korea Press Center and announced the '3rd Basic Plan for Franchise Business Promotion (2021~2025)' containing these details.

As of 2019, the domestic franchise business consists of about 5,000 franchisors and 270,000 franchise stores, with annual sales (122 trillion KRW) accounting for 6.4% of the Gross Domestic Product (GDP), and franchise workers (1.33 million) making up 4.7% of total employment. An official from the Ministry of Trade, Industry and Energy explained, "A total of 392 brands have expanded into 58 countries worldwide, showing quantitative and qualitative growth," but added, "Challenges to be addressed include industry concentration by sector, small scale and vulnerability, weak brand competitiveness, and conflicts and disputes between franchisors and franchisees."

Accordingly, under the vision of 'Advancing the Franchise Industry Structure and Expanding a Sustainable Growth Foundation,' the government plans to strengthen the innovation capabilities of franchise businesses and support the spread of a culture of win-win cooperation.

First, the government intends to create innovative services based on regulatory innovation, new technologies, and information. This includes ▲creating new business models using regulatory sandboxes such as shared kitchens and instant food vending machines ▲demonstrations of manufacturing and serving robots for pizza and coffee ▲supporting the creation of innovative services through smartification of franchise stores using IoT and AR new technologies. To strengthen the self-sustainability of franchise businesses, efforts will be made to build information infrastructure such as a comprehensive information support system that provides one-stop support from startup to overseas expansion through online expos and store training, along with training of professionals.

The government will also work on industrial structure advancement through promising franchise startups and service standardization. To resolve industrial imbalance concentrated in the food service sector and to discover and nurture promising franchises, tailored growth support by growth stage will be provided, and the Franchise Expo will be held twice a year. Furthermore, pilot projects and institutional improvements will be promoted for the development of group standards and standard manuals for franchise services, aiming to spread service group standards including service quality management, complaint and dispute handling, hygiene environment, and facility safety management.

To induce win-win and balanced development in franchise business, legal and institutional improvements will also be pursued. Amendments to the Franchise Business Act will be made, including the introduction of a 'prior consent system' for advertising and promotional events, and detailed criteria for judging unfair practices will be established. Comprehensive support for franchise store operators will be provided through the full-scale operation of the Franchise Comprehensive Support Center. Additionally, the 'Franchise Win-Win Council' will be launched to discover and support win-win cooperation models among franchise businesses, and communication and education between operators will be supported through the 'Win-Win Cooperation Academy' and 'Win-Win Cooperation Mentoring Group.'

To promote the globalization of franchise brands, support for overseas local market research, overseas expansion consulting, and participation in overseas expos and exhibitions will be provided to franchise business operators, and stable settlement will be supported through overseas joint logistics centers. Moreover, monitoring of unauthorized trademark occupation will be strengthened through the 'K-Brand Infringement Reporting Center,' and rapid legal consultation and dispute response will be supported using the 'Overseas Intellectual Property Center.'

Minister of Trade, Industry and Energy Sung Yun-mo said, "Franchises create new markets based on creative ideas and greatly contribute to stabilizing the economy of ordinary people through the organization and profit generation of small self-employed businesses," adding, "Through faithful implementation of the announced basic plan, we will continuously invest over five years, including 200 billion KRW this year, to expand the innovation capabilities of franchise businesses, advance the industrial structure, and realize continuous win-win cooperation."

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