Franchise Industry Accelerates ESG Management Again This Year

[Asia Economy Reporter Moon Hyewon] The franchise industry is focusing on ESG (Environmental, Social, and Governance) management under the banner of ‘co-prosperity with franchisees’ this year as well as last year.

According to the industry on the 11th, Ediya Coffee has been running the ‘Franchisee Children Campus Hope Fund,’ which provides scholarships to franchisees’ children, since 2016. Last year, it awarded 2 million KRW each to 91 children of 88 store owners, totaling 182 million KRW, and over six years including this payment, it has delivered a total of 976 million KRW to 488 recipients.

Additionally, Ediya Coffee has operated the ‘Ediya Mate Hope Fund,’ which awards scholarships twice a year to part-time employees called ‘Ediya Mates’ working at stores nationwide since 2013. Over the past 10 years, it has supported a total of 3534 scholarship recipients with 1.767 billion KRW in scholarships.

The Fair Trade Commission and the Korea Fair Trade Mediation Agency selected 100 franchisors as ‘Good Franchises’ last year, which supported approximately 5,3132 franchise stores with about 18.8 billion KRW. Among the ways these franchisors supported their franchisees, the largest was reducing advertising and promotional costs at 37.3%, followed by royalty reductions at 31.4%, and operational fund support at 18.6%. In particular, Ediya Coffee and others were recognized for various co-prosperity activities with franchisees and were selected as ‘Excellent Co-prosperity Model Franchises.’

Some companies hold ‘Excellent Franchisee Awards’ to boost the morale of franchisees struggling due to COVID-19 restrictions such as limits on private gatherings and business hours. School Food has been awarding excellent franchisees since 2020, presenting plaques and prize money. The evaluation for excellent franchisees is based on various criteria including Quality, Service, and Cleanness, with a particular focus on the ‘Cleanness’ category, which has become crucial due to the surge in delivery demand amid COVID-19.

Kyochon Chicken conducts the ‘Atti’ training program to understand the difficulties franchisees face while operating stores after the initial training before opening. This is an on-site customized training conducted one-on-one by visiting franchise stores directly, rather than uniform education and inspections conducted by headquarters for all franchise stores. It is designed to empathize with franchisees’ hardships and help them acquire successful store know-how.

A franchise industry official said, “In the COVID-19 era, ESG management has become an indispensable element, and co-prosperity between franchisors and franchisees affects the growth and survival of brands,” adding, “We must focus on establishing more practical and helpful systems from the perspective of franchisees facing difficulties due to COVID-19.”

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