Franchise Dispute

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A number of franchise headquarters have allegedly forced their franchisees to purchase essential items from certain businesses. Franchisees who say they suffered under this practice have reported the executives of the main franchise office to the prosecution.

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This franchisee has been in a difficulty since the BBQ headquarters designated a certain credit card processing company. When a card processing company is changed, points of sale and card processors must be changed as well. A new set of processing device costs more than one million won.

[Soundbite] (BBQ Franchisee (Voice Modified)) : "The franchiser wrote up a contract mandating the use of a certain processing company. Franchisees who have been using other companies now have to terminate their contracts with them."

The BBQ main office claims that franchisees can use other card processing companies if they want. But since other companies are not linked to the headquarters' computer system, franchisees have to write down the amount of every transaction. This means that the franchisees are forced to only use the card processing company that has been designated. Franchisees of another chicken franchise BHC claim that the main office is making undue profits by having franchisees purchase a container of sunflower oil, a necessity item for the fried chicken stores, at over 60,000 won from the franchiser.

[Soundbite] Jeon Seong-il(BHC Franchisee) : "To my knowledge, the price we pay for the oil is over twice that paid by the franchiser's main office."

The BHC headquarters say that they were found innocent by the Fair Trade Commission investigators, but the franchisees reported the executives of the main office to the prosecution for fraud. Last February, lawmakers tabled a revision bill to the franchise business act, which forbids franchisers from making excessive profits by forcing franchisees to deal with certain businesses for essential items, but the bill still hasn't been reviewed by the relevant standing committee.