bhc Chicken voluntarily corrects delivery app promotion error... Refunds 470 million KRW to franchise stores

Check of Unmet 70% Prior Consent Requirement
Refund of Shared Costs to Over 1,600 Stores
Separate Measures Planned for Franchise Owners of Closed or Suspended Stores

bhc Chicken headquarters announced on the 8th that it discovered an error in the promotional events conducted through delivery applications (apps) due to failure to meet the prior consent requirements, and fully refunded a total of 470 million KRW in shared costs to the franchise stores.

bhc Chicken logo

Under the current Franchise Business Act, promotional events involving cost-sharing by franchisees must obtain consent from more than 70% of all franchisees before the event starts in order to proceed with the promotion even for franchisees who do not agree. However, it was revealed that bhc Chicken headquarters failed to meet the prior consent requirements in a total of 15 cases during promotional campaigns with delivery apps such as Baemin, Yogiyo, Ttaenggyeoyo, and Coupang Eats after the amendment of the Franchise Business Act in July 2022.

Among these, 13 cases exceeded the 70% consent rate after the event started, while 2 cases fell short of the 70% consent threshold with 69.2% and 67.3%, respectively. The company explained that this was discovered during a compliance diagnosis process conducted by external experts.

As of 7 a.m. on the same day, bhc Chicken headquarters processed full refunds of the shared costs to the approximately 1,600 affected franchise stores. They also plan to separately contact franchisees who have already closed or ceased operations to fully refund them.

bhc Chicken headquarters admitted, "There was an error in the work process of the related department due to failure to thoroughly manage real-time subscription status confirmation following franchise transfers and voluntary delivery app cancellations by franchisees, as well as differing contract conditions or standards for each delivery app." They added, "We will improve the process and system related to obtaining consent for promotional events, strengthen collaborative relationships with delivery apps, and minimize urgent changes, extensions, or additions to events to prevent similar cases from recurring."

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