Seoul, Gyeonggi, Incheon, and Busan Cities Obtain Authority to Impose Fines for Franchise Business Act Violations

[Asia Economy Sejong=Reporter Dongwoo Lee] Starting from the 20th, not only the Fair Trade Commission but also the Seoul Metropolitan Government, Gyeonggi Province, Incheon, and Busan Metropolitan City will be able to impose fines on franchisors who violate the Franchise Business Act.

The Fair Trade Commission announced on the 19th that with the enforcement of the revised Enforcement Decree of the Franchise Business Act, Seoul, Gyeonggi, Incheon, and Busan will have expanded authority to impose fines on franchisors located in their respective regions for violations of the Franchise Business Act.

Until now, Seoul, Gyeonggi, and Incheon have been imposing fines since 2019, and Busan since 2020, for two types of violations: failure to register changes to the disclosure document and failure to report changes.

With the expansion of the scope, Seoul, Gyeonggi, Incheon, and Busan will also be able to impose fines for five types of violations, including franchisors located in their regions failing to provide prospective franchisees with estimated sales statements, among other violations of the Franchise Business Act.

This measure considers that these violations can be addressed through simple fact verification, allowing local governments, which are closely connected to the field, to impose fines more swiftly, thereby protecting the rights and interests of prospective franchisees and franchisees.

The Fair Trade Commission plans to conduct training for local government officials starting on the 20th to support the smooth execution of the newly assigned duties of imposing and collecting fines in these regions. Approximately 20 participants, including officials from the Fair Trade Commission and local governments, will attend the training to discuss amendments to the Franchise Business Act, examples of fines imposed by the Fair Trade Commission, and enforcement know-how.

The Fair Trade Commission stated, "By enabling Seoul, Gyeonggi, Incheon, and Busan to impose fines more promptly on franchisors violating the Franchise Business Act in their regions, we expect this to greatly contribute to protecting the rights and interests of prospective franchisees and franchisees."

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