Korea Economic Association Conveys Concerns to National Assembly Over Franchise Business Act Revision

The Korea Economic Association has expressed its concerns to the National Assembly regarding the proposed revision of the Franchise Business Act and the Agency Act. The association, which represents the interests of the business community, has requested that lawmakers carefully review certain provisions that could have significant implications for franchisees and small and medium-sized businesses.

One of the key concerns is the provision that abolishes the period for franchisees to exercise their right to request contract renewal. Currently, franchisees have a 10-year window to request contract renewal, but the revised bill would allow them to do so indefinitely. The Korea Federation of Small and Medium Businesses has argued that this provision could create uncertainty and instability for franchise headquarters.

The Korea Federation of Trade Unions has also pointed out that the revised bill is inconsistent with other laws, such as the Commercial Building Lease Protection Act, which limits the period for exercising the right to request contract renewal to 10 years. The federation has argued that the revised bill could create legal inequities and undermine the rights of franchisees.

The Korea Federation of Small and Medium Businesses has also expressed concerns about the provision that requires franchise headquarters to comply with requests from business groups to negotiate transaction terms. The federation has argued that this provision could create an excessive burden on franchise headquarters and undermine their ability to negotiate contracts.

Furthermore, the Korea Federation of Small and Medium Businesses has expressed concerns about the provision on the right to form a dealership business group in the revised dealership law. The federation has argued that this provision could create a risk of price fixing and undermine competition in the market.

Lee Sang-ho, head of the Economic and Industrial Headquarters of the Korea Federation of Banks, has emphasized the need for a fair and balanced approach to contract negotiations. “Franchise headquarters and agency headquarters do not have an absolute advantage in the contract, but are ‘one side of the contract,'” he said. “Improvements are needed to ensure that the rights of both parties are fairly guaranteed.”