2024-04-23 19:01:28
The convenience store and franchise industries are in turmoil as the amendment to the Act on Fairness of Franchise Business Transactions (Franchise Business Act) was directly referred to the plenary session of the National Assembly by the opposition party alone on the 23rd.
The main point of the amendment is to grant collective bargaining rights to franchise owners. Some in the industry believe that if the amendment passes the National Assembly, conflicts between franchisees and store owners will intensify.
Once the amendment goes into effect, franchisees will be granted legal status if they form an organization and register with the Fair Trade Commission.
If an organization requests consultation from the head office and the head office does not respond, it may receive corrective action from the Fair Trade Commission or may be subject to criminal charges if the organization continues to fail to implement the corrective action.
There are concerns in the industry that if multiple organizations form together and each request consultation, normal management of the head office may become impossible and normal management may become difficult.
Consumers may suffer direct damage. If franchise owners use their collective bargaining rights to increase the margins of franchise stores, there is a possibility that the final consumer price will rise and act as a price burden.
An official in the convenience store industry pointed out, “Franchise owners are individual business owners, and it is difficult to view them as workers,” and added, “If an organization formed by franchise owners excessively infringes on the management rights of the headquarters, it can hinder the development as well as the creation of a healthy franchise ecosystem.” did.
An official in the franchise industry said, “If multiple franchise owner organizations are formed and attempt to negotiate with the headquarters through multiple channels, the headquarters’ management activities may be greatly reduced or made difficult because they will have to respond individually.”
Another industry official said, “It is regrettable that the legislation gives priority to only one party’s claims and does not accept both parties’ opinions in a balanced manner,” and added, “The legislation was pushed forward without specific guidelines clearly outlined, which could lead to side effects such as illegal acts in contracts in the future.” “There are also great concerns about this,” he pointed out.
Some point out that the burden on consumers may increase.
An industry insider said, “If some franchise owners’ councils do not participate in promotions of new products, etc. through their bargaining rights, the utility they receive from consumers will ultimately be reduced.” “It may become impossible and the benefits for consumers may be limited,” he said.
He continued, “If the margins of franchise stores are raised through collective bargaining rights, consumer prices may also rise and harm the convenience of consumers. “If consumer prices rise, it may also put a burden on prices,” he pointed out.
(Seoul = News 1)
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2024-04-23 19:01:28