Byeolbitgangmul, a franchise operator, has come under scrutiny for providing a disclosure document that omitted information about a former executive's criminal conviction and for violating the legal cooling-off period when signing franchise agreements.
On August 3, the Fair Trade Commission announced that it would impose a fine of 72 million won on Byeolbitgangmul for violating the Franchise Business Act by failing to disclose the executive's conviction. Byeolbitgangmul operates the 'Bottle Shop' brand, which distributes and retails wine and coffee.
According to the Fair Trade Commission's investigation, Byeolbitgangmul provided a total of 43 potential franchisees with disclosure documents from January 2022 to June 2024, omitting the fact that an executive had been convicted of fraud in November 2021.
The commission deemed this act as deceptive information provision. The conviction related to property crimes, such as fraud, is considered a significant factor that could influence the signing of franchise agreements, and failing to disclose it constitutes a violation of the enforcement decree of the Franchise Business Act.
Additionally, it was revealed that Byeolbitgangmul provided the disclosure documents directly while requiring potential franchisees to submit a handwritten confirmation that they had not completed the required legal documentation. During this process, Byeolbitgangmul hastily signed contracts with 27 potential franchisees before the legal cooling-off period of 14 days had elapsed, further violating the obligation to provide disclosure documents.
The Fair Trade Commission viewed this as another violation of the Franchise Business Act. According to the act, disclosure documents must be provided following accurate procedures, and no franchise fees can be collected or contracts signed before 14 days have passed from the date of provision.
As a result, the Fair Trade Commission has issued a corrective order and imposed a fine on Byeolbitgangmul.
A Fair Trade Commission official stated, "We plan to continuously monitor and take strict action against deceptive practices in the provision of disclosure documents to ensure that potential franchisees can engage in fair transactions with the headquarters on equal footing."
On August 3, the Fair Trade Commission announced that it would impose a fine of 72 million won on Byeolbitgangmul for violating the Franchise Business Act by failing to disclose the executive's conviction. Byeolbitgangmul operates the 'Bottle Shop' brand, which distributes and retails wine and coffee.
According to the Fair Trade Commission's investigation, Byeolbitgangmul provided a total of 43 potential franchisees with disclosure documents from January 2022 to June 2024, omitting the fact that an executive had been convicted of fraud in November 2021.
The commission deemed this act as deceptive information provision. The conviction related to property crimes, such as fraud, is considered a significant factor that could influence the signing of franchise agreements, and failing to disclose it constitutes a violation of the enforcement decree of the Franchise Business Act.
Additionally, it was revealed that Byeolbitgangmul provided the disclosure documents directly while requiring potential franchisees to submit a handwritten confirmation that they had not completed the required legal documentation. During this process, Byeolbitgangmul hastily signed contracts with 27 potential franchisees before the legal cooling-off period of 14 days had elapsed, further violating the obligation to provide disclosure documents.
The Fair Trade Commission viewed this as another violation of the Franchise Business Act. According to the act, disclosure documents must be provided following accurate procedures, and no franchise fees can be collected or contracts signed before 14 days have passed from the date of provision.
As a result, the Fair Trade Commission has issued a corrective order and imposed a fine on Byeolbitgangmul.
A Fair Trade Commission official stated, "We plan to continuously monitor and take strict action against deceptive practices in the provision of disclosure documents to ensure that potential franchisees can engage in fair transactions with the headquarters on equal footing."
* This article has been translated by AI.
Copyright ⓒ Aju Press All rights reserved.