Fair Trade Commission "Hollys Coffee Failed to Provide Disclosure Document Before Franchise Agreement... Corrective Order Issued"

[Sejong=Asia Economy Reporter Joo Sang-don] The Korea Fair Trade Commission announced on the 2nd that it has decided to impose corrective orders (including educational orders) on KG Hollys F&B, the franchisor of Hollys Coffee, for failing to provide the disclosure document and nearby franchise status documents before signing the franchise agreement, or for signing the franchise agreement or receiving franchise fees before 14 days have passed since the provision date.

According to the Fair Trade Commission, KG Hollys F&B did not provide the disclosure document and nearby franchise status documents, which must be provided before signing the franchise agreement, from February 2014 to May 2018. Additionally, from February 2014 to May 2018, despite the requirement to receive franchise fees or sign franchise agreements only after 14 days have passed since providing the disclosure document or nearby franchise status documents, the company failed to comply with this rule.

Accordingly, the Fair Trade Commission ordered KG Hollys F&B to refrain from repeating the same or similar acts in the future and to conduct more than three hours of education on the Franchise Business Act for its executives and employees.

A Fair Trade Commission official stated, "This decision is significant in that it penalizes the franchisor for obstructing the reasonable choice of prospective franchisees by not providing important information contained in the disclosure document or nearby franchise status documents during the franchise agreement process, or by not allowing sufficient reflection time."

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