"Fair Trade Commission Fine for 'Interfering with Store Owners' Group Activities'... BBQ and BHC 'Considering Legal Action'"

[Asia Economy Reporter Seungjin Lee] Genesis BBQ and BHC, which were fined billions of won by the Fair Trade Commission for unilaterally terminating contracts with franchisees who led franchisee group activities, are considering legal action.

On the 20th, the Fair Trade Commission announced that it decided to impose fines of 1.532 billion KRW and 500 million KRW respectively on chicken franchises BBQ and BHC for disadvantages such as notifying franchisees who led franchisee group activities of contract termination or refusing contract renewal.

According to the Fair Trade Commission, BBQ is accused of refusing contract renewals or making six franchisees who led the establishment and activities of the ‘National BBQ Franchisee Association’ sign pledges stating they would not engage in association activities.

In this regard, BBQ expressed regret.

In a press release issued that day, BBQ stated, "We regret that we did not have sufficient opportunity to explain as our case, which started investigation in May last year, was merged with other cases that had been investigated for the past four years."

They added, "The disadvantage due to group activities is a single case of 'refusal to renew contract' after 10 years, which is guaranteed under the Franchise Business Act. It is not a unilateral contract termination and has already been ruled by the court as not problematic. The reason for refusal to renew was not group activities but defamation," emphasizing this point.

BBQ also explained regarding the Fair Trade Commission’s investigation result that franchisees were forced to order flyers only through the flyer mall operated by BBQ, saying, "There is no such case, and on the contrary, there are hundreds of cases where franchisees individually produced flyers. We have already submitted evidence for this. Also, prior approval for self-production was obtained informally via SNS to prevent risks such as unauthorized use of portrait rights."

BBQ said, "We deeply regret that most of our explanations were not accepted and the investigation was hastily concluded," adding, "Since there are sufficient acquittal precedents in court, we will fully explain again through legal procedures in the future."

BHC is also considering legal action.

BHC stated, "Regarding disadvantages due to group activities, the termination was not due to conducting group activities but due to spreading false information. Since there was serious brand image damage in the past due to false information dissemination, we plan to review the resolution and discuss legal procedures."

The Fair Trade Commission regards BHC as having immediately terminated contracts without just cause with seven franchisees, including Ulsan Okdong branch (chairman of the association), who led the establishment and activities of the ‘National BHC Franchisee Association (BHC Association).’

The BHC Association, led by the association president and key executives in 2018, raised issues about the quality and price of chicken and sunflower oil supplied by BHC and reported related matters to the media. In response, BHC immediately terminated contracts with seven franchisees who led the association activities, citing defamation that clearly damaged the headquarters’ honor and credit.

The Fair Trade Commission judged that there was no evidence that the association’s media reports clearly constituted false information dissemination or caused significant obstacles to the franchise business by damaging the headquarters’ honor or credit.

Additionally, BHC is accused of forcing all franchisees to handle E-coupons from October 2018 without basis in the franchise contract and disclosure documents, and making them bear all the fees agreed with the E-coupon agency.

Regarding this, BHC explained, "There were procedural deficiencies before 2019 regarding the E-coupon corrective order, but the franchise contract was amended and applied in November 2019, and since then, procedures have been carried out properly without issues."

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