FTC Launches Annual Survey to Assess Unfair Practices by Franchisors

The Fair Trade Commission (FTC) announced that it will conduct a written survey on the franchise sector from July 27 to October 31.

The FTC has carried out this survey annually to inspect the operational status of major franchise systems and trade practices.

This year's survey targets 200 franchisors and 12,000 franchisees across 21 industries, including chicken, bakery, coffee, fast food, and convenience stores.

Through this survey, the FTC plans to assess the perceived improvement in unfair practices and overall policy satisfaction.

Notably, the cosmetics sector, which has recently seen an increase in disputes, has been newly added to this year's survey targets.

Conflicts frequently arise between cosmetics franchisees and franchisors over differential franchise fees, a type of distribution margin collected by franchisors.

In addition, the FTC plans to focus on checking whether improvements to the mandatory items system introduced in 2024 have successfully taken root in the market.

At that time, the FTC revised regulations to make it mandatory to state the types of essential items, the method for calculating supply prices, and the procedures for consulting on changes to transaction terms in franchise contracts.

Prior consultation was also made mandatory when changing transaction terms related to essential items in a manner disadvantageous to franchisees.

The results of the survey analysis are scheduled to be released in December.

The FTC plans to use the results as baseline data for establishing ex officio investigation plans, reviewing the performance of system operations, and setting policy directions.

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※ Please note: This article was translated by AI and may contain errors.