In the future, 'Good Franchise' Selection Will Be Canceled for Violations of the Franchise Business Act

Fair Trade Commission Announces 2021 Good Franchise Business Reform Plan

[Sejong=Asia Economy Reporter Joo Sang-don] From this year, businesses that have received corrective orders or more severe penalties such as fines or prosecution for violating the Franchise Business Act within the past year will be ineligible to apply for the Good Franchise program. If a franchise headquarters selected as a Good Franchise violates the law afterward, the issuance of the Good Franchise certificate will be revoked.

The Fair Trade Commission announced the "2021 Good Franchise Business Reform Plan" containing these details on the 12th.

Since 2020, to minimize the impact of COVID-19 and establish a recovery foundation for small business owners and SMEs, the Fair Trade Commission has been issuing Good Franchise certificates to franchise headquarters that alleviate the burden on franchisees and providing financial incentives. Last year, 270 franchise headquarters participated in the Good Franchise program, providing a total of 26 billion KRW in cash support to approximately 37,000 franchisees struggling due to the COVID-19 aftermath.

However, limitations were pointed out as certificates were issued even to franchise headquarters with a history of legal violations, which socially cannot be considered "good." Therefore, disqualification criteria have been newly established.

In addition to the existing financial support requirements, the support criteria for Good Franchises have been expanded to include win-win cooperation requirements between franchise headquarters and franchisees. Even small franchise headquarters without financial support capacity can receive the Good Franchise certificate if they exemplarily cooperate with franchisees.

A Fair Trade Commission official stated, "We hope that through this reform and continued promotion of the Good Franchise program, the 5,602 franchise headquarters nationwide supporting 260,000 franchisees will sustain and expand their win-win cooperation." He added, "The Fair Trade Commission will strengthen the screening of Good Franchises to enhance the credibility of the program and widely promote the system so that as many franchise headquarters and franchisees as possible can benefit."

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