Issuing Discount Vouchers Without Store Owner Consent Is Unfair... Fair Trade Commission Establishes Review Guidelines

Guidelines for Reviewing Unfair Trade Practices in the Franchise Sector

In the future, franchisors that issue mobile gift certificates without the consent of franchisees may be punished for unfair trade practices. Franchisees will be able to purchase items such as containers or straws from places other than the specific companies designated by the franchisor.

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On the 29th, the Fair Trade Commission announced that it will establish and publicly notify the "Guidelines for Reviewing Unfair Trade Practices in the Franchise Sector" containing these provisions. The draft was based on the Fair Trade Commission's rulings, court precedents, and an analysis of recent major issues in the franchise business sector, presenting criteria for determining illegality by type of conduct and examples of violations. Types such as unjust refusal to renew contracts, binding trading partners, unjust demands for store environment improvements, unfair infringement of business areas, and retaliatory measures, along with respective cases, were specified.

Forcing franchisees to purchase easily obtainable items such as containers, straws, and napkins only from places designated by the franchisor is considered an unfair practice. Issuing mobile gift certificates without the consent of franchisees or unilaterally forcing them to bear costs such as fees may also constitute unfair practices. The Fair Trade Commission stated, "We plan to finalize the draft after fully collecting opinions from stakeholders during the public notice period."

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