[2022 National Audit] Fair Trade Commission Chair: "Investigation Underway on Legality of Susenhak Franchise Support Suspension"

Controversy Over Sudden Suspension of Sinsago Academy Franchise Business

On the 21st, Hong Beom-jun, CEO of Sinsago, Ordered to Attend at the Political Affairs Committee Audit

Han Ki-jung, Chairman of the Fair Trade Commission, responding to a lawmaker's question at the National Assembly's Political Affairs Committee audit held on the 7th. Chairman Han also attended the comprehensive audit on the 21st. (Image source=Yonhap News)

[Asia Economy Reporter Moon Chae-seok] Han Ki-jung, Chairman of the Fair Trade Commission, announced on the 21st that the commission is investigating whether the suspension of franchisee support by Sinsago Academy, a subsidiary of the educational publishing company Joheunchaek Sinsago, which stopped the franchise business of the academy 'Ssen Math Learning Center,' violates the Franchise Business Act.

Chairman Han made this remark during the comprehensive audit of the National Assembly's Political Affairs Committee when Min Byung-duk, a member of the Democratic Party of Korea, asked if there were any measures to address the problems arising from Ssen Math's suspension of its franchise business.

Han stated, "The termination of the franchise branch contracts was not considered a violation of the Fair Trade Act and was dismissed without charges." However, he added that an investigation is ongoing regarding the suspension of franchisee support, noting, "The investigation is being delayed as additional reports continue to be submitted."

When Representative Min pointed out that "franchise branches and regional headquarters, from the perspective of franchisees, are considered the headquarters, but they are in a subordinate position to the franchisor," Chairman Han responded, "We will review the issues related to these intermediary parts and branches."

Sinsago Academy had signed new contracts until 2019 but unilaterally suspended its franchise business in April of the following year, refusing to renew contracts with a significant number of branches nationwide, causing controversy. The academy rejected 80% of contract renewals with branches nationwide in February last year and refused to renew the remaining 20% of contracts in February this year.

Representative Min pointed out that although there were 849 franchise stores as of April 2020, the headquarters unilaterally withdrew from the franchise business and stopped supplying textbooks, videos, and other materials, causing damage to the franchisees.

The Political Affairs Committee selected Hong Beom-jun, CEO of Joheunchaek Sinsago, as a witness for this national audit to verify related matters. However, when CEO Hong did not appear, the committee resolved to issue a summons on the same day.

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