Fair Trade Commission "Yogerpresso Provided Exaggerated Sales Information to Franchise Applicants... Corrective Order and 131 Million KRW Fine"

Yogerpresso's Merry Strawberry

[Asia Economy Reporter Joo Sang-don] The Fair Trade Commission announced on the 18th that it has decided to issue a corrective order and impose a fine of 131 million KRW on Yogerpresso for exaggerating and providing information about expected sales figures without objective grounds while signing franchise agreements with 205 prospective franchisees.

According to the Fair Trade Commission, Yogerpresso violated the Franchise Business Act by exaggerating or providing false information about expected sales figures without objective grounds while signing franchise agreements with 205 prospective franchisees from January 2, 2017, to January 13, 2020.

Contrary to the notice that expected sales figures were calculated based on franchise stores with similar planned store locations and commercial district types, Yogerpresso calculated expected sales figures based on four franchise stores nationwide that ranked high in annual sales in the previous year for each commercial district and provided this information to the 205 prospective franchisees. This was 30% to 90% higher than the average expected sales figures for each commercial district.

Additionally, for 142 prospective franchisees, Yogerpresso provided expected sales figures that included value-added tax (VAT) but falsely stated that VAT was excluded, thereby inflating the expected sales figures by an additional 10%.

As a result, the Fair Trade Commission viewed that prospective franchisees of Yogerpresso were forced to make decisions about opening franchise stores based on exaggerated or false expected sales information, which hindered their rational judgment.

Accordingly, the Fair Trade Commission ordered Yogerpresso to cease such violations in the future, notify all franchisees that it has received a corrective order from the Fair Trade Commission, and conduct a three-hour training session on the Franchise Business Act for its executives and employees. In addition, a fine of 131 million KRW was imposed.

A Fair Trade Commission official stated, "This case is significant in that strict sanctions were imposed for providing false and exaggerated expected sales information to many prospective franchisees, thereby hindering rational decision-making," and added, "This measure is expected to serve as an opportunity for franchisors to provide expected sales information calculated based on objective grounds when signing franchise agreements."

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