On September 8, 2026, at a press conference held in Yeouido, Seoul, Nam Myung-seok, the president of the Korea Franchise Industry Association, expressed deep concerns regarding the recently proposed amendments to the Franchise Business Act. The amendments, which include new requirements for the registration of franchisee associations, have raised alarms among industry stakeholders. The association asserts that these changes may inadvertently escalate conflicts between franchisors and franchisees rather than foster constructive dialogue.
The proposed regulations, which have garnered attention for their significant alterations, particularly a reduction in the minimum percentage of franchisees required for association registration from 30% to 10%, have been met with skepticism by the association. Nam criticized the lack of adequate explanation from the government regarding these changes, arguing that they could lead to an increase in disputes and confusion within the franchise sector. He emphasized that the government’s approach seems to create a system that encourages constant conflict rather than one that promotes effective communication and collaboration.
The request for a franchisee association’s right to request consultations was included in the amendments passed by the National Assembly last December, with implementation slated for the end of this year. However, the association contends that the process leading up to this announcement was unilaterally executed by the Fair Trade Commission (FTC), despite previous commitments to engage in meaningful discussions.
Furthermore, the association highlighted potential pitfalls in the proposed regulations, such as the broad scope of consultation topics, the ambiguous role of third-party participants, and the short timeframes for re-requesting consultations, which could undermine the stability of franchise operations. Nam pointed out that with the revised requirement allowing for a greater number of smaller, less representative associations to form, the clarity on which group should be consulted by franchisors becomes increasingly obscured. He warned that this could lead to an excessive number of consultations, turning what should be productive discussions into a source of perpetual conflict.
Emphasizing the need for a higher threshold for representation, Nam stated that a minimum of 40% representation should be the norm to ensure that consultations are meaningful and representative of the franchisee community. He expressed concern that if the registration criteria remain as lax as they are proposed, it could lead to an environment where multiple associations with conflicting agendas could inundate franchisors with competing demands.
Additionally, the expansion of the consultation topics to encompass all aspects of franchise agreements, including critical elements such as franchise fees, operational territories, and renewal terms, poses significant challenges. Nam argued that such an approach could severely infringe on franchisors’ proprietary interests and compromise their operational integrity. He maintained that franchisors’ core business strategies should remain exempt from negotiations to preserve the essence of their brands and operations.
The proposed regulation also stipulates that once a consultation on a particular topic concludes, a re-request can only be made after a waiting period of 180 days for the same topic, or 60 days for different topics. Nam raised concerns that this could burden franchisors, as they may find themselves in endless negotiations if various associations continually put forth differing proposals. He pointed out that many small and medium-sized franchisors lack the resources to manage such an ongoing demand for consultations effectively.
In light of these issues, the association plans to bring its concerns to the FTC in a forthcoming meeting scheduled for September 11, where it will advocate for necessary amendments to the proposed regulations. The association aims to articulate the need for adjustments that ensure a balanced approach to franchisee representation and collaboration, while also protecting the integrity of franchisors’ operations.
[관련기사] https://n.news.naver.com/mnews/article/001/0016297135?sid=101
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