Salady Forced Franchisees to Buy Disposable Items Like Spoons... Fair Trade Commission Says “Non-Essential Consumables Cannot Be Mandated”

Salady, a franchise headquarters specializing in salads, has been sanctioned by the Fair Trade Commission after forcing franchise owners to purchase disposable items that are readily available on the market exclusively from designated suppliers.

Eco-friendly spoon forcibly sold by Saladly. Fair Trade Commission.

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On April 27, the Fair Trade Commission announced its decision to impose a corrective order and a notification order to franchise owners against Salady for violating the Franchise Business Act by forcing the purchase of items unrelated to the maintenance of franchise business uniformity.

According to the Fair Trade Commission, Salady headquarters designated biodegradable "eco-friendly spoons and forks" made from corn and other materials as mandatory items in the disclosure statement and franchise agreement. Franchise owners were required to purchase these items only through logistics or distribution companies designated by the headquarters. The contract included a clause stating that failure to comply could result in contract termination or penalty charges.

However, the Fair Trade Commission's investigation found that these items were ordinary disposable products of the same quality that could be purchased at lower prices from online shopping malls and other sources. Despite not being essential for maintaining the core taste or quality of the salad brand, the headquarters excessively restricted franchisees' choice in order to generate profit.

The current Franchise Business Act limits the designation of "mandatory items" to those essential for maintaining the uniformity of a franchise business. The Fair Trade Commission concluded that Salady's actions were unfair, pointing out that the eco-friendly disposable products in this case were not directly related to the unique taste or quality of the brand and did not have any unique specifications or ingredients that differentiated them from products on the market.

This sanction is interpreted as a warning against the recent practice among franchise headquarters of bundling ordinary industrial goods, such as disposable items and cleaning supplies-not key sauces or ingredients-as mandatory items in order to collect "tolls" from franchisees.

Through this corrective order, the Fair Trade Commission has required Salady to prevent any recurrence of similar actions in the future and to officially notify all current franchise owners of the sanctions imposed by the Commission.

An official from the Fair Trade Commission stated, "We will continue to monitor unfair practices where franchise headquarters infringe on franchisees' autonomous purchasing rights for their own profit," adding, "We will also work to improve the practice of designating excessive mandatory items that place undue burdens on franchise owners and foster a fair franchise business environment."

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