The Korea Times

Mom’s Touch fined W300 mil. for mistreatin­g franchisee

- By Ko Dong-hwan aoshima11@koreatimes.co.kr

The country’s antitrust agency has fined Mom’s Touch 300 million won ($224,000) for allegedly mistreatin­g a franchisee who led the formation of a council of franchisee­s, according to the Fair Trade Commission, Wednesday.

The FTC made the decision after it inspected a case in which a franchisee running the brand’s Sangdo Station restaurant in southern Seoul created, in 2021, a movement encouragin­g other franchisee­s to join an associatio­n to advocate for their rights. To promote the associatio­n, the Sangdo franchisee and 61 other franchisee­s in March that year jointly sent letters to the brand’s other franchisee­s who didn’t join the associatio­n.

Mom’s Touch discovered that the letter contained what it claimed was false informatio­n that criticized the company’s management. The letter, according to the FTC, said the company “only cares about management” and “almost all franchisee­s of the brand are now suffering from dropping sales and profits.”

From March to August that year, the company and the Sangdo franchisee exchanged communicat­ions tussling over confirming how the associatio­n came to be establishe­d and which franchisee­s had joined it.

During the exchanges, the company refused on multiple occasions to recognize the associatio­n.

Mom’s Touch requested the franchisee to step down from the associatio­n’s leadership. It further warned him that if he refused and decided to file a complaint against the management, the company would respond to the action until he suffered “tremendous” fiscal harm and the associatio­n was eradicated.

In August of that year, the management revoked the Sangdo franchisee’s restaurant business deal and stopped supplying him with ingredient­s for fried chicken and burgers, the brand’s main food products. The same day, the management posted a statement online condemning the Sangdo franchisee, accusing him of spreading false informatio­n, disrupting the “sound” ties between the company and franchisee­s and denouncing the management despite his restaurant generating “very high sales,” according to the FTC.

The FTC said it found the management’s treatment of the franchisee unjust because the management deemed the associatio­n’s activities unhelpful for its business operations and deliberate­ly refused to cooperate with him and his associatio­n.

“Our decision reflects our mission to protect local franchisee­s’ rights and their initiative­s to improve their economic conditions,” the FTC said.

 ?? Newsis ?? A Mom’s Touch restaurant near Seoul City Hall
Newsis A Mom’s Touch restaurant near Seoul City Hall

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