Franchise Association: "No Law to Create Store Owner Groups Stronger Than Labor Unions"

Opposition to Direct Referral of Franchise Business Act to Plenary Session
Legislative Protest Rally in Front of National Assembly on 26th
"Concerns Over Proliferation of Store Owner Groups and Excessive Requests for Consultation"
"Amendment Should Be Created Together by Headquarters and Franchise Owners"

"If the amendment that grants business associations stronger authority than labor unions is hastily passed, the K-franchise industry will decline significantly." (Kang Hyeong-jun, Chairman of the Special Countermeasures Committee on the Franchise Business Act, Korea Franchise Industry Association)

The Subcommittee on Bill Review 1 of the Political Affairs Committee is being held at the National Assembly. Photo by Hyunmin Kim kimhyun81@

As the Democratic Party of Korea announced on the 29th that it plans to directly submit the amendment to the Franchise Business Act, which includes the registration system for franchisee associations, to the plenary session, franchise headquarters have strongly opposed it.

The Korea Franchise Industry Association held a resolution rally on the morning of the 26th in front of the National Assembly in Yeouido, Seoul, to oppose the "hasty legislation of the unreasonable Franchise Business Act" and urged for a reconsideration of the amendment.

The amendment introduces a registration system for franchisee associations and includes provisions to sanction franchise headquarters if they fail to respond to the association's request for consultation. It also guarantees the right to request contract renewal. The bill was promoted as cases of franchisees suffering from unfair cost charges and unilateral contract termination notices by headquarters became frequent.

Last December, the Democratic Party of Korea suddenly submitted the amendment to the Franchise Business Act during the full meeting of the Political Affairs Committee and passed it. The amendment, currently pending in the Legislation and Judiciary Committee, is planned to be directly submitted to the plenary session on the 29th. If a bill passed by the relevant standing committee is held in the Legislation and Judiciary Committee for 60 days, the chairman of the standing committee can directly submit it to the plenary session with the approval of three-fifths of the total members.

As the likelihood of the amendment's passage increases, the Franchise Association strongly opposes it, calling it "a bill that grants business associations stronger authority than labor unions." Chairman Jeong Hyun-sik emphasized, "If multiple associations proliferate and consultation requests are excessively made for each of the approximately 11,000 brands, most of which are small and medium-sized enterprises, normal management will become impossible."

He also argued that in the situation where the K-culture craze has spread to K-food, the amendment could hinder the global expansion of K-franchises. Kang Hyeong-jun, Chairman of the Special Countermeasures Committee on the Franchise Business Act of the Franchise Association, stated in a press release, "Inquiries about K-franchises are flooding in from various countries, but if the amendment is hastily passed, not only will the birth of K-franchises surpassing McDonald's and KFC be impossible, but the franchise industry will also decline significantly."

The Franchise Association urged the Fair Trade Commission, academia, headquarters, and franchisees to carefully reconsider the amendment in the next National Assembly. They also requested that the Franchise Business Promotion Act, aimed at fostering global franchises alongside a mutually beneficial Franchise Business Act, be amended and promoted together.

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