ENFORCEMENT DECREE OF THE FAIR TRANSACTIONS IN FRANCHISE BUSINESS ACT
Presidential Decree No. 17773, Nov. 6, 2002
Amended by Presidential Decree No. 18000, jun. 13, 2003
Presidential Decree No. 18331, Mar. 22, 2004
Presidential Decree No. 20594, Jan. 31, 2008
Presidential Decree No. 20947, Jul. 29, 2008
Presidential Decree No. 22003, Jan. 27, 2010
Presidential Decree No. 22151, May 4, 2010
Presidential Decree No. 22446, Oct. 13, 2010
Presidential Decree No. 23169, Sep. 29, 2011
Presidential Decree No. 23488, Jan. 6, 2012
Presidential Decree No. 23644, Feb. 29, 2012
Presidential Decree No. 23775, May 7, 2012
Presidential Decree No. 25050, Dec. 30, 2013
Presidential Decree No. 25175, Feb. 11, 2014
Presidential Decree No. 25840, Dec. 9, 2014
Presidential Decree No. 26034, Jan. 6, 2015
Presidential Decree No. 26176, Mar. 30, 2015
Presidential Decree No. 27528, Sep. 29, 2016
Presidential Decree No. 27751, Dec. 30, 2016
Presidential Decree No. 27946, Mar. 20, 2017
Presidential Decree No. 28471, Dec. 12, 2017
Presidential Decree No. 28786, Apr. 3, 2018
Presidential Decree No. 29043, Jul. 10, 2018
Presidential Decree No. 29392, Dec. 18, 2018
Presidential Decree No. 30509, Mar. 3, 2020
Presidential Decree No. 30649, Apr. 28, 2020
| Article 2 Deleted. <Jan. 31, 2008> |
| Article 3 (Definitions of Franchise Fee) |
| 1. | A fee that a franchisee pays to a credit card company when a consumer purchases goods or services from the franchisee using a credit card; |
| 2. | A fee or discount that a franchisee pays to a gift certificate issuing company when a consumer purchases goods or services from the franchisee using a gift certificate; |
| 4. | A reasonable wholesale price of any consideration a franchisee pays to a franchiser pursuant to subparagraph 6 (c) of Article 2 of the Act (referring to the price at which a franchisee may purchase, lease, or exchange goods or services through normal channels of trade where the wholesale price has not been set, or referring to the purchase price where a franchiser supplies goods or services by purchasing those from another business operator; hereinafter the same shall apply); |
| 5. | Other money not vested in a franchiser that is paid to a third institution on behalf of a consumer. |
| (2) | "That is specified by Presidential Decree" in subparagraph 6 (d) of Article 2 of the Act means any of the following consideration: <Newly Inserted on Jan. 31, 2008> |
| 1. | Consideration that a franchisee pays to a franchiser, on a regular or irregular basis, at a fixed rate or at a certain rate of sales, operating earnings, etc. under the pretext of a royalty for the trademark; a lease fee; a share of advertising costs; a training fee; rents for signs, indemnity for a business territory; etc.; |
| 2. | Consideration exceeding a reasonable wholesale price of any consideration that a franchisee pays to a franchiser, on a regular or irregular basis, with respect to prices for goods, main ingredients, minor ingredients, fixtures, equipment, and raw materials or rent of real property: Provided, That the foregoing shall not apply to consideration for rights under the Patent Act acquired by the franchiser to his/her goods, etc. |
| (3) | The Fair Trade Commission may determine and publicly notify reasonable wholesale prices provided for in paragraphs (1) 4 and (2) 2. <Amended on Jan. 31, 2008> |
| Article 4 (Matters to be Included in Information Disclosure Statements) |
| (1) | "Matters specified by Presidential Decree" in subparagraph 10 of Article 2 of the Act, excluding its subparagraphs, means matters included in attached Table 1 (hereinafter referred to as "matters in the disclosed information"). <Amended on Jan. 31, 2008> |
| (2) | An information disclosure statement shall consist of a cover page, table of contents and matters in the disclosed information, and the content thereof shall be definite and specific, and the information disclosure statement shall be prepared in a separate document for each cover page of business so that a prospective franchisee can readily understand the content thereof. <Amended on Jan. 31, 2008> |
| (3) | A franchiser may state matters not provided for in attached Table 1 in an information disclosure statement, which are required for the operation of a franchise. <Newly Inserted on Jan. 31, 2008> |
| (4) | Where the Fair Trade Commission deems it necessary, it may determine and publicly notify detailed matters on matters in the disclosed information by type of business, by store format, or by use. <Amended on Jan. 31, 2008> |
| Article 5 (Exclusion of Application) |
| (1) | "Amount prescribed by Presidential Decree" in Article 3 (1) 1 of the Act means one million won. <Amended on May 7, 2012; Feb. 11, 2014> |
| (2) | "Size prescribed by Presidential Decree" in the main clause of Article 3 (1) 2 of the Act means 50 million won (where any direct retail store is opened and operated for the sales of commodities or services in accordance with the quality standards or business methods of the relevant franchise business, referring to 50 million won, including the sales of the direct retail store): Provided, That where the franchiser has established and operated any direct retail store before the franchiser commences the franchise business for at least one year, such size shall be 200 million won (referring to 200 million won including the sales of the direct retail store. <Amended by Apr. 28, 2020> |
| (3) | The computation of the amount under paragraph (2) shall be based on the sales stated in the profit and loss statement of the preceding business year: Provided, That where a franchiser does not prepare a profit and loss statement, the amount shall be the total amount of the tax basis and the amount of tax-free income on the final return of value-added tax for the preceding two taxation periods under the Value-Added Tax Act. <Newly Inserted on Jan. 31, 2008; Oct. 13, 2010> |
| (4) | Where one year has not elapsed after a franchiser started a franchise, the total amount of the tax basis and the amount of tax-free income on the final return of value-added tax (where the franchiser has failed to file the final return of value-added tax, referring to an estimated return of value-added tax) from the time he/she started business until he/she filed the final return of value-added tax finally shall be deemed an amount referred to in the proviso to paragraph (3). <Newly Inserted on Jan. 31, 2008; Oct. 13, 2010> |
| (5) | "Number prescribed by Presidential Decree" in the proviso to Article 3 (1) 2 of the Act means five. <Newly Inserted on Feb. 11, 2014> |
| Article 5-2 (Registration of Information Disclosure Statements) |
| (1) | Agencies with which information disclosure statements shall be registered pursuant to Article 6-2 (1) of the Act shall be classified as follows: <Newly Inserted on Dec. 18, 2018> |
| 1. | Where the seat of the principal office of a franchiser (hereafter in this paragraph, referred to as "seat of the principal office") is in Seoul Special Metropolitan City: The Seoul Metropolitan City Mayor; |
| 2. | Where the seat of the principal office is in Incheon Metropolitan City: The Incheon Metropolitan City Mayor; |
| 3. | Where the seat of the principal office is in Gyeonggi-do: The Gyeongi-do Governor; |
| 4. | Where the seat of the principal office is in a Metropolitan City, Special Self-Governing City, Do or Special Self-Governing Province determined and publicly notified by the Fair Trade Commission: The relevant Metropolitan City Mayor, Special Self-Governing City Mayor, Do Governor or Special Self-Governing Province Governor; |
| 5. | Where the seat of the principal office is in any other area: The Fair Trade Commission. |
| (2) | Where a franchiser intends to register an information disclosure statement pursuant to Article 6-2 (1) of the Act, it shall submit an application for new registration of an information disclosure statement prescribed in attached Form 1 accompanied by the following documents to the Fair Trade Commission; or the relevant Special Metropolitan City Mayor, Metropolitan City Mayor, Special Self-Governing City Mayor, Do Governor or Special Self-Governing Province Governor (hereinafter referred to as "Mayor/Do Governor"): <Amended on Oct. 13, 2010; May 7, 2012; Dec. 18, 2018> |
| 2. | Statements of financial position and statements of profit or loss for the preceding three business years (where a franchiser fails to prepare financial statements, referring to documents by which sales of the preceding three business years can be verified); |
| 3. | A list of franchiser-operated stores and franchisees that are operated as at the end of the preceding business year (the names of the representatives, locations, the dates of entering into franchise agreements and telephone numbers thereof shall be mentioned); |
| 4. | A copy of a franchise agreement format; |
| 5. | A document by which the number of executive officers and employees working as at the end of the preceding business year may be verified; |
| 6. | Other documents related to the details of an information disclosure statement, which the Fair Trade Commission or a Mayor/Do Governor requests to be submitted. |
| (3) | The Fair Trade Commission to which an application has been submitted pursuant to paragraph (2) shall verify the following documents by sharing administrative information under Article 36 (1) of the Electronic Government Act: Provided, That where an applicant refuses to consent to the verification referred to in subparagraphs 2 and 3, the Fair Trade Commission or a Mayor/Do Governor shall have the applicant submit such documents (in the case referred to in subparagraph 3, referring to a copy thereof): <Amended on Oct. 13, 2010; Dec. 18, 2018> |
| 1. | A certificate of registered matters of the corporation (limited to where a franchiser is a corporation); |
| 2. | Where a corporation applies for registration before the relevant corporation registers the incorporation, an abstract of resident registration card of a promoter intending to establish a corporation; |
| 3. | A certificate of business registration (the Fair Trade Commission may verify such certificate or an applicant may submit such certificate within 30 days after the date the Fair Trade Commission issues a certificate of registration of the information disclosure statement pursuant to paragraph (4)). |
| (4) | Where an application for registration under paragraph (2) is filed, the Fair Trade Commission or a Mayor/Do Governor shall issue a certificate of registration of the information disclosure statement (hereinafter referred to as "certificate of registration") prescribed in attached Form 2 to a franchiser within 30 days after the date of application for registration (or within two months where a franchiser whose registration was revoked pursuant to Article 6-4 of the Act applies for the registration again), and manage matters concerning registration in a franchise business information system referred to in Article 6-2 (5) of the Act (hereinafter referred to as "franchise information system"). <Newly Inserted on Oct. 13, 2010; Feb. 11, 2014; Dec. 18, 2018> |
| (5) | Notwithstanding paragraph (4), in any of the following cases, the Fair Trade Commission or a Mayor/Do Governor may request a franchiser to change or supplement the necessary content only once, within a reasonable fixed period, or refuse to register the information disclosure statement: <Amended on Oct. 13, 2010; Dec. 18, 2018> |
| 1. | Where matters mentioned in the information disclosure statement are different from facts or some information is not included in such statement; |
| 2. | Where the franchiser fails to submit accompanying documents referred to in paragraph (2) 2 through 6; |
| 3. | Where the franchiser fails to consent to the verification referred to in paragraph (3) 2 and 3 and to submit such documents. |
| (6) | In any of the following cases, the Fair Trade Commission or a Mayor/Do Governor shall refuse to register an information disclosure statement and notify the franchiser of such fact: <Amended on Oct. 13, 2010; Dec. 18, 2018> |
| 1. | Where any matter included in the information disclosure statement or in accompanying documents is false; |
| 2. | Where the franchiser fails to comply with the Fair Trade Commission's request for change or supplementation under paragraph (5). |
| (7) | Where a franchiser complies with the Fair Trade Commission's request for change or supplementation under paragraph (5), the date the franchiser complies with such request shall be deemed the date the franchiser applies for registration. <Amended on Oct. 13, 2010; Dec. 18, 2018> |
| (8) | A franchiser may apply for registration of an information disclosure statement under paragraph (2) through the franchise information system. <Newly Inserted on Oct. 13, 2010; Dec. 18, 2018> |
[This Article Newly Inserted on Jan. 31, 2008]
| Article 5-3 (Registration of Modification and Reporting of Modification of Information Disclosure Statement) |
| (1) | "Matters prescribed by Presidential Decree" in the main clause of Article 6-2 (2) of the Act means matters in the registration of modification under attached Table 1-2. <Newly Inserted on Feb. 11, 2014> |
| (2) | "Period prescribed by Presidential Decree" in the main clause of Article 6-2 (2) of the Act means a period listed in attached Table 1-2. <Newly Inserted on Feb. 11, 2014> |
| (3) | Where a matter in the registration of modification provided for in attached Table 1-2 is modified, a franchiser shall submit an application for registration of modification in an information disclosure statement prescribed in attached Form 4 to the Fair Trade Commission or the competent Mayor/Do Governor, accompanied with the following documents within a period fixed in the same Table. In such cases, the Fair Trade Commission or the Mayor/Do Governor shall verify (only applicable where the verification is required for reporting a modification) a certificate of registered matters of the corporation and a certificate of business registration by sharing administrative information under Article 36 (1) of the Electronic Government Act, and where the franchiser refuses consent to the verification of a certificate of business registration, the franchiser shall be requested to attach such documents: <Amended on May 7, 2012; Feb. 11, 2014; Dec. 18, 2018> |
| 1. | A modified information disclosure statement; |
| 2. | Documents supporting the amended details; |
| 3. | A certificate of registration (only applicable where a matter included in the certificate of registration is modified). |
| (4) | Article 5-2 (1) and (3) through (7) shall apply mutatis mutandis to procedures for registration of modification and for the refusal thereof. In such cases, "30 days" in Article 5-2 (4) shall be construed as "20 days." <Amended on Oct. 13, 2010; Feb. 11, 2014; Dec. 18, 2018> |
| (5) | "Insignificant matters prescribed by Presidential Decree" in the proviso to Article 6-2 (2) of the Act means matters in the report of modification under attached Table 1-2. <Amended on Oct. 13, 2010; Feb. 11, 2014> |
| (6) | Where a matter in the registration of modification provided for in attached Table 1-2 is modified, a franchiser shall submit an application for modification in an information disclosure statement prescribed in attached Form 4 to the Fair Trade Commission or the competent Mayor/Do Governor, accompanied with a document that proves the modified content within a period fixed in the same Table. In such cases, the Fair Trade Commission or the Mayor/Do Governor shall verify (only applicable where the verification is required for reporting a modification) a certificate of registered matters of the corporation and a certificate of business registration by sharing administrative information under Article 36 (1) of the Electronic Government Act, and where the franchiser refuses consent to the verification of a certificate of business registration, the franchiser shall be requested to attach such document. <Amended on Oct. 13, 2010; May 7, 2012; Feb. 11, 2014; Dec. 18, 2018> |
| (7) | Where an application for registration of modification under paragraph (3) is filed or a report of modification under paragraph (6) is filed, the Fair Trade Commission or the relevant Mayor/Do Governor shall manage matters concerning the registration of modification or the report of modification in the franchise information system. <Amended on Oct. 13, 2010; Feb. 11, 2014; Dec. 18, 2018> |
| (8) | Where a franchiser registers or reports a modified information disclosure statement, such franchiser shall submit such information disclosure statement accompanied with an information disclosure statement in the form of electronic file using an information and communications network. <Amended on Feb. 11, 2014> |
| (9) | Deleted. <Sep. 29, 2016> |
| (10) | Deleted. <Sep. 29, 2016> |
| (11) | The franchiser may apply for registration of modification under paragraph (3) or report a modification under paragraph (6), using the franchise information system. <Newly Inserted on Sep. 29, 2016> |
[This Article Newly Inserted on Jan. 31, 2008]
| Article 5-4 (Disclosure, etc. of Information Disclosure Statements) |
| (1) | Deleted. <Mar. 20, 2017> |
| (2) | Where the Fair Trade Commission or a Mayor/Do Governor discloses a franchise disclose document, they shall inform a franchiser of such disclosure pursuant to Article 6-2 (4) of the Act, in writing, specifying the following in advance by no later than ten days before the date of disclosure: <Amended on Feb. 11, 2014; Dec. 18, 2018> |
| 1. | The purpose of disclosure and the period of disclosure; |
| 2. | Details of disclosure; |
| 3. | Methods of disclosure; |
| 4. | Methods of a franchiser's request for correction or non-disclosure. |
| (3) | Where any content is false or any content falls under the proviso to Article 6-2 (3) of the Act among the details of disclosure, a franchiser given notice under paragraph (2) may request the Fair Trade Commission or the competent Mayor/Do Governor to correct or not to disclose such content, in writing, accompanied with a document proving such fact within seven days from the date the franchiser is notified. In such cases, where the Fair Trade Commission or the Mayor/Do Governor deems a franchiser's request reasonable, they shall not change the details of disclosed information of the relevant information disclosure statement nor disclose such information. <Amended on Mar. 20, 2017; Dec. 18, 2018> |
| (4) | Deleted. <May 7, 2012> |
[This Article Newly Inserted on Jan. 31, 2008]
| Article 5-5 (Revocation, etc. of Registration of Information Disclosure Statement) |
| (1) | Where the Fair Trade Commission or a Mayor/Do Governor has revoked the registration of an information disclosure statement on a ground specified in Article 6-4 (1) 1 or 2 of the Act, they shall notify a franchiser of such fact and the ground for revocation in writing within seven days from the date of revocation. <Amended on Feb. 11, 2014; Mar. 20, 2017; Dec. 18, 2018> |
| (2) | "Important matter prescribed by Presidential Decree" in Article 6-4 (1) 3 of the Act (hereinafter referred to as "important matter") means any of the following matters: <Amended on Oct. 13, 2010; Feb. 11, 2014; Sep. 29, 2016; Mar. 20, 2017> |
| 1. | Subparagraph 1 of attached Table 1; |
| 2. | Subparagraph 2 (a), (b) (applicable only to matters related to the franchiser), (c) through (f), (g) (applicable only to matters related to the representative thereof) and (h) through (j) of attached Table 1; |
| 3. | Subparagraph 3 (b) through (j) of attached Table 1; |
| 4. | Subparagraphs 4 through 6, 8 and 9 of attached Table 1. |
| (3) | Where a ground specified in Article 6-4 (1) 3 of the Act arises, the Fair Trade Commission or the competent Mayor/Do Governor shall request a franchiser to supplement such important matter omitted within a reasonable fixed period: Provided, That in any of the following cases, the Fair Trade Commission may revoke the registration of an information disclosure statement without requesting supplementation in consideration of the degree imputable to the franchiser, the viability thereof, the probability of suffering incurred by prospective franchisees, impact on the existing franchisees, etc.: <Amended on Feb. 11, 2014; Mar. 20, 2017; Dec. 18, 2018> |
| 1. | Where the franchiser reports the suspension of business or the discontinuance of business; |
| 2. | Where the franchiser files for bankruptcy; |
| 3. | Where compulsory execution procedures or workout procedures commence on the franchiser; |
| 4. | Where bills or checks issued by the franchiser are dishonored due to the default of payment, etc.; |
| 5. | Where the franchiser suspends its business due to the death of its representative or unknown whereabouts of its representative; |
| 6. | Where the Fair Trade Commission or the Mayor/Do Governor determines that it is impracticable for the franchiser to normally operate the franchise, and such cases correspond to the provisions of subparagraphs 1 through 5. |
| (4) | Where a franchiser is requested for the supplementation under the main clause of paragraph (3), it shall supplement such important matter omitted and apply for registration of modification in an information disclosure statement pursuant to Article 5-3. |
[This Article Newly Inserted on Jan. 31, 2008]
| Article 5-6 (Guidelines for Processing Administrative Affairs Related to Registration, etc. of Information Disclosure Statements) |
The Fair Trade Commission may determine the details necessary to enforce the provisions of Articles 5-2 through Article 5-5 to consistently process administrative affairs related to the registration, disclosure, revocation, etc. of the registration of information disclosure statements between the Fair Trade Commission and Mayors/Do Governors. [This Article Newly Inserted on Dec. 18, 2018]
[Previous Article 5-8 moved to Article 5-7 <Dec. 18, 2018>]
| Article 5-7 (Depository Institutions of Franchise Fees) |
"Institution designated by Presidential Decree" in the main clause of Article 6-5 (1) of the Act (hereinafter referred to as "depository") means any of the following institutions: <Amended on Jul. 29, 2008; Oct. 13, 2010> [This Article Newly Inserted on Jan. 31, 2008]
[Moved from Article 5-6; Previous Article 5-7 moved to Article 5-8 <Dec. 18, 2018>]
| Article 5-8 (Deposit, etc. of Franchise Fees) |
| (1) | Where a franchiser has franchisees (including prospective franchisees; hereafter in this Article and Articles 5-9 and 16-2, the same shall apply) deposit franchise fees pursuant to the main clause of Article 6-5 (1) of the Act, the franchiser shall designate a depository and enter into a contract for the deposit of franchise fees with such depository. <Amended on Oct. 13, 2010; Dec. 18, 2018> |
| (2) | A franchiser shall deliver an application for the deposit of a franchise fee prescribed in attached Form 5 (hereinafter referred to as "application for deposit") to a franchisee, and the franchisee shall file for the deposit of a franchise fee (hereinafter referred to as "deposited franchise fee") under the main clause of Article 6-5 (1) of the Act, with the depository designated, accompanied by the application for the deposit of a franchise fee. |
| (3) | Where a franchiser delivers an application for deposit to a franchisee pursuant to paragraph (2), the franchiser shall notify the franchisee of the fact that a deposited franchisee fee will be vested in the franchiser if the franchisee falls under any of subparagraphs of Article 6-5 (3) of the Act. |
| (4) | Where the head of a depository receives an application for deposit pursuant to paragraph (2), he/she shall deposit a deposited franchise fee in the name of the depository, and manage such deposited franchise fee separately from other financial assets. |
| (5) | Where the head of a depository deposits a deposited franchise fee pursuant to paragraph (4), he/she shall issue a certificate of deposit of a franchise fee (hereinafter referred to as "certificate of deposit") prescribed in attached Form 6 to a franchiser and a franchisee, respectively. |
[This Article Newly Inserted on Jan. 31, 2008]
[Moved from Article 5-7; Previous Article 5-8 moved to Article 5-9 <Dec. 18, 2018>]
| Article 5-9 (Payment and Return of Deposited Franchise Fees) |
| (1) | Where a franchiser intends to request a depository to pay a deposited franchise fee pursuant to Article 6-5 (3) of the Act, it shall submit a written request for payment (return) of a deposited franchise fee prescribed in attached Form 7 (hereinafter referred to as "written request for payment of a franchise fee") to the head of the depository. In such cases, where a franchisee falls under a ground referred to in Article 6-5 (3) 1 of the Act, the franchiser shall submit a document proving that the franchisee commences business or a written confirmation prepared by the franchisee. <Amended on May 7, 2012> |
| (2) | Where any ground referred to in Article 6-5 (5) 1 through 3 of the Act arises, a franchisee shall submit a written request for withholding payment of a deposited franchise fee prescribed in attached Form 8 to the head of a depository, accompanied with a document proving such fact. |
| (3) | Where a franchiser intends to request the payment of a deposited franchise fee or a franchisee intends to request the return of a deposited franchise fee pursuant to Article 6-5 (6) of the Act, the franchiser or the franchisee shall submit a written request for the payment of a deposited franchise fee to the head of a depository, accompanied with a document proving such fact. |
| (4) | Where a franchisee intends to request the return of a deposited franchise fee pursuant to Article 6-5 (7) of the Act, it shall submit a written request for the payment of a deposited franchise fee to the head of a depository, accompanied with the written consent of a franchiser. |
| (5) | The head of a depository may perform procedures necessary for application for the deposit of a franchise fee, the payment and return thereof using an information and communications network. In such cases, the head of the depository may have a franchiser and a franchisee use an accredited certificate under subparagraph 8 of Article 2 of the Digital Signature Act in order to verify their identity. |
| (6) | The head of a depository shall retain evidentiary documents, etc. a franchiser or a franchisee has submitted pursuant to paragraphs (1) through (4) for a period of three months from the date he/she pays or returns the relevant deposited franchise fee. |
| (7) | The Fair Trade Commission may request the head of a depository to provide business data on the current status of the deposit, payment and return of franchise fees. |
| (8) | The Fair Trade Commission may determine and publicly notify other detailed matters necessary for the deposit, payment, and return of franchise fees. |
[This Article Newly Inserted on Jan. 31, 2008]
[Moved from Article 5-8 <Dec. 18, 2018>]
| Article 6 (Provision, etc. of Information Disclosure Statements) |
| (1) | Where a franchiser (including where a master franchisee or franchise broker recruits a franchisee; hereinafter the same shall apply) provides a prospective franchisee with an information disclosure statement pursuant to Article 7 (1) of the Act, it shall provide the information disclosure statement by any of the following methods: Provided, That in cases referred to in subparagraphs 3 and 4, it shall take measures that the information disclosure statement may be printed or output in a document form: <Amended Jan. 31, 2008; Feb. 11, 2014; Jan. 6, 2015> |
| 1. | Delivering the information disclosure statement to a prospective franchisee directly. In such cases, it shall prepare a document that states all the following matters (referring to the document in which a prospective franchisee prepares matters referred to in items (a) through (c) in his/her own handwriting) and deliver the document to the prospective franchisee: |
| (a) | The fact that he/she has received the information disclosure statement, the date and time, and the place of the receipt of the information disclosure statement; |
| (b) | Name, address, and telephone number of the prospective franchisee; |
| (c) | Signature or signature and sealing of the prospective franchisee; |
| (d) | Signature or signature and sealing of the franchiser; |
| 2. | Providing the information disclosure statement to the prospective franchisee by content-certified mail that may confirm the timing of providing the information disclosure statement; |
| 3. | Posting a notice of the details of the information disclosure statement using any information and communications network and informing a prospective franchisee of the fact of posting the notice. In such cases, a franchiser shall prepare a system through which a specific prospective franchisee and the franchiser may confirm the time such prospective franchisee has read the details of the information disclosure statement; |
| 4. | Sending an electronic file that includes the details of the information disclosure statement to the email address of a prospective franchisee. In such cases, the franchiser shall use a method that enables to confirm whether email is sent and their receipt time. |
| (2) | Notwithstanding paragraph (1), when a franchiser deems it necessary for a prospective franchisee's convenience, the franchiser may prepare a separate document (hereinafter referred to as "explanation") concerning any part of the disclosed information and provide such explanation. In such cases, a table of contents of the disclosed information mentioned in the explanation shall be mentioned in the information disclosure statement. |
| (3) | Where important matters are changed before entering into a franchise agreement after a franchiser has provided an information disclosure statement, the franchiser shall notify a prospective franchisee of the changed matters without delay by any method falling under the subparagraphs of paragraph (1). <Amended Jan. 31, 2008> |
| (4) | Deleted. <Feb. 11, 2014> |
| (5) | Deleted. <Feb. 11, 2014> |
| Article 7 (Standard Form of Information Disclosure Statement) |
The Fair Trade Commission may determine and publicly notify a standard form of the information disclosure statement by type of business, by store format, or by use pursuant to Article 7 (4) of the Act. <Amended on Oct. 13, 2010; Feb. 11, 2014>
| Article 8 (Types of Act of Providing False or Exaggerated Information, etc.) |
| 1. | Providing the estimated earnings of a franchisee in an exaggerated manner without objective grounds or providing information as if a franchiser guarantees minimum earnings, etc. different from fact; |
| 2. | Providing unconfirmed information in relation to the analysis of a business district where a franchisee's store is planned to be located; |
| 3. | Providing information as if a franchiser has acquired intellectual property rights which the franchiser has not acquired; |
| 4. | Any act determined and publicly notified by the Fair Trade Commission, which is providing information different from fact or by exaggerating the fact corresponding to acts under subparagraphs 1 through 3. |
| 1. | Providing an information disclosure statement that does not mention important matters to a prospective franchisee; |
| 2. | Notwithstanding the fact that money, goods, services, etc. provided to a franchisee by a franchiser are provided only where certain requirements are met, providing information as if money, goods, services, etc. are provided in all cases without presenting the relevant requirements; |
| 3. | Any act determined and publicly notified by the Fair Trade Commission, which is providing information by concealing or diminishing the fact that has a significant impact on the conclusion and maintenance of a contract corresponding to an act under subparagraph 1 or 2. |
[This Article Newly Inserted on Feb. 11, 2014]
| Article 9 (Providing Information about Expected Profits) |
| (1) | "Information ... prescribed by Presidential Decree" in Article 9 (4) of the Act means the following information: <Amended on Jan. 31, 2008; Oct. 13, 2010; Feb. 11, 2014; Apr. 28, 2020> |
| 1. | Information on a realistic rationale and forecast used for the computation of current profits or estimated profits; |
| 2. | The following information which form the basis of computation of current profits or estimated profits: |
| (a) | The number of stores for the franchise business (including direct retail stores and franchisees; hereinafter the same shall apply); |
| (b) | The number of stores under item (a) compared to the total number of stores of the relevant franchise business; |
| (c) | The distance between each store under item (a) and the place for a relevant future store; |
| 3. | The number and percentage of franchisees which make profits at the same level as current profits or estimated profits a franchiser or franchise broker indicates or explains during the latest given period (in such cases, the beginning date and the finishing date of the latest given period shall be indicated). |
| (2) | The Fair Trade Commission may determine and publicly notify detailed matters on data under paragraph (1) by type of business, by store format, or by use. |
| (3) | "Range of estimated sales prescribed by Presidential Decree" in Article 9 (5), excluding its subparagraphs, of the Act means the range defined as the lowest amount and the highest amount of sales estimated to be generated for one year from the date of commencing business at the planned location of the store of a prospective franchisee. In such cases, the highest amount of such sales shall not exceed 1.7 times the lowest amount of such sales. <Newly Inserted on Feb. 11, 2014> |
| (4) | Notwithstanding paragraph (3), where there are at least five member stores (limited to member stores, the period of business of which in the immediately preceding year is at least six months; hereafter in this paragraph, the same shall apply) of the relevant franchiser in the relevant Special Metropolitan City, Metropolitan City, Special Self-Governing City, Do or Special Self-Governing Province (hereinafter referred to as "City/Do"), among five member stores most adjacent to the planned location of the store, the range defined as the lowest amount and the highest amount of the amount converted to sales in the immediately preceding year under attached Table 1-3 of three member stores excluding the lowest store and the highest store, the amount converted to sales of which in the immediately preceding year under the aforesaid Table may take the place of the range under paragraph (3). <Newly Inserted on Feb. 11, 2014; Dec. 18, 2018> |
[Title Amended on Feb. 11, 2014]
| Article 10 (Request for Return of Franchise Fees) |
A franchisee or a prospective franchisee who intends to request the return of a franchise fee pursuant to Article 10 (1) of the Act shall request such return in writing mentioning the following matters: <Amended on Jan. 31, 2008> | 1. | The name and address of a franchisee or a prospective franchisee who requests the return of a franchise fee; |
| 2. | The fact that a franchiser has provided false or exaggerated information or omitted important matters; |
| 3. | The fact that a franchiser is deemed to have had a significant impact on the conclusion of a franchise agreement by providing false or exaggerated information or by omitting important matters; |
| 4. | The fact that a franchiser has unilaterally discontinued the franchise without good cause and the date of such action; |
| 5. | The amount of a franchise fee subject to return; |
| 6. | The fact that a franchiser has not provided an information disclosure statement or the fact that the franchiser has received a franchise fee from a prospective franchisee or has entered into a franchise agreement with the prospective franchisee under circumstances that 14 days (where the prospective franchisee has taken advice on the information disclosure statement from an attorney-at-law or a fair trader under Article 27 of the Act, referring to seven days) have not elapsed since the franchiser provided the information disclosure statement, and the date of such action. |
| Article 11 (Date of Cessation of Franchise Business) |
"Cessation date of the franchise business specified by Presidential Decree" in Article 10 (1) 4 of the Act means the date falling under any of the following: <Amended on Jan. 31, 2008> | 1. | Where the franchiser notifies the franchisee of the cessation date of the franchise business, the date such notification reaches the franchisee; |
| 2. | Where the franchiser has ceased trading of real property, services, equipment, goods, etc. that have a significant impact on the operation of the franchise business for not less than ten days without notifying the franchisee in advance and, notwithstanding that the franchisee requests the franchiser to resume trading with the date for the resumption of trading fixed in writing, the franchiser fails to comply with such request, the date for the resumption of trading fixed in writing. |
| Article 12 (Matters concerning Rights and Obligations of Parties to Franchise) |
"Matters specified by Presidential Decree" in Article 11 (2) 12 of the Act means any of the following matters: <Amended on Jun. 13, 2003; Oct. 13, 2010; Dec. 18, 2018> | 1. | Matters concerning the conditions of return of money, such as a franchise fee; |
| 2. | Matters concerning the installation of equipment, fixtures, etc. for business of a franchisee and the maintenance and repair thereof and the bearing of such expenses; |
| 3. | Matters concerning measures to be taken according to the expiration and termination of a franchise agreement; |
| 4. | Matters concerning good cause by which a franchiser may refuse to renew a franchise agreement; |
| 5. | Matters concerning trade secret of a franchiser; |
| 6. | Matters concerning compensation for loss due to violation of a franchise agreement; |
| 7. | Matters concerning procedures for the resolution of a dispute between a franchiser and a franchisee; |
| 8. | Where a franchiser transfers a franchise to another franchisee, matters concerning a franchise agreement with the former franchisee; |
| 9. | Matters concerning measures to be taken at the expiration of the period of validity of a franchiser’s intellectual property rights. |
| Article 12-2 (Criteria for Judging Unjustness of Penalties for Breach of Agreement) |
"Criteria prescribed by Presidential Decree, such as the purpose and contents of an agreement, and losses that will occur" in Article 12 (1) 5 of the Act means the following criteria: | 1. | The purpose and contents of the agreement; |
| 2. | The size of losses that will arise; |
| 3. | Whether attributable causes exist between the parties to the agreement, and the level of attributable causes; |
| 4. | Normal business practices in the relevant type of business. |
[This Article Newly Inserted on Feb. 11, 2014]
| Article 13 (Types of or Criteria for Unfair Trade Practices) |
| (1) | Types of and criteria for unfair trade practices under Article 12 (2) of the Act shall be as specified in attached Table 2. |
| (2) | Where the Fair Trade Commission deems it necessary, it may determine and publicly notify the detailed types of and criteria for unfair trading practices that apply to specific types of business or specific acts within the scope of types and criteria referred to in attached Table 2. |
| Article 13-2 (Scope of and Procedures for Bearing Expenses Incurred in Improving Store Environment, etc.) |
| 1. | Where facilities, equipment, interior, etc. of the store is deemed deteriorated objectively; |
| 2. | Where it is difficult to maintain the unity of franchise business due to sanitary or safety defects, or reasons corresponding thereto, or such defects interfere with normal business remarkably. |
| 1. | The costs of replacing a signboard; |
| 2. | The costs of interior decoration work (referring to all the costs incurred in performing interior decoration work excluding the costs of replacing equipment and utensils): Provided, That costs incurred for additional work performed by a franchisee irrespective of the unity of franchise business shall be excluded. |
| (3) | "Percentage prescribed by Presidential Decree" in the main clause of Article 12-2 (2) of the Act means either of the percentages according to the following classification: |
| 1. | In cases of the improvement of the store environment that does not involve the expansion or relocation of the store: 20/100; |
| 2. | In cases of the improvement of the store environment that involves the expansion or relocation of the store: 40/100. |
| (4) | Where a franchisee intends to demand payment of the amount pursuant to the main clause of Article 12-2 (2) of the Act (hereinafter referred to as "amount to be borne by the franchiser"), he/she shall submit documents that may prove the costs of work, such as a written contract for work, to the franchiser. |
| (5) | A franchiser shall pay the amount to be borne by the franchiser to a franchisee within 90 days from the date the franchisee demands payment under paragraph (4): Provided, That where the franchiser and the franchisee agree otherwise, the franchiser may pay the amount to be borne by the franchiser in installments within one year. |
| (6) | Notwithstanding the main clauses of paragraphs (4) and (5), every franchiser shall, if a franchisee improves the store environment through the franchiser or through a person the franchiser designates, pay the amount to be borne by the franchiser to the franchisee within 90 days from the date the improvement of the store environment is completed. <Newly Inserted on Apr. 3, 2018> |
| (7) | Where a contract expires (including the termination of the contract or business transfer) due to a reason not imputable to a franchiser from the date the improvement of the store environment is done, the franchiser may choose not to pay the amount to be borne in proportion to the remaining period of the amount to be borne by the franchiser, or where it has already paid the amount to be borne, it may withdraw the amount already paid. <Amended on Apr. 3, 2018> |
[This Article Newly Inserted on Feb. 11, 2014]
| Article 13-3 (Criteria for Judging Prohibition of Unfair Restriction on Business Hours) |
| (1) | "Midnight business hours prescribed by Presidential Decree" in Article 12-3 (2) 1 of the Act means from 0:00 am to 6:00 am, or 1:00 am to 6:00 am. <Amended on Apr. 3, 2018> |
| (2) | "Certain period prescribed by Presidential Decree" in Article 12-3 (2) 1 of the Act means three months immediately preceding the month to which the date a franchisee requests a reduction in the opening hours belongs. <Amended on Apr. 3, 2018> |
[This Article Newly Inserted on Feb. 11, 2014]
| Article 13-4 (Reasons for Change of Area of Business) |
"Where reasons prescribed by Presidential Decree, such as a sudden change in the business district, occur" in Article 12-4 (2) of the Act means any of the following cases: | 1. | Where a sudden change in the business district occurs due to reconstruction, redevelopment, or new ton construction; |
| 2. | Where there is a remarkable change in the resident population or the floating population in the relevant business district; |
| 3. | Where there is a remarkable change in demand for the relevant goods or services due to changes in preference of consumers, etc.; |
| 4. | Where it is deemed remarkably unreasonable to maintain the existing area of business as it is, which is any of the cases corresponding to subparagraphs 1 through 3. |
[This Article Newly Inserted on Feb. 11, 2014]
| Article 13-5 (Notification Procedure, etc. of Execution Details regarding Advertising or Promotional Events) |
| (1) | A franchiser shall notify a franchisee of the following matters within three months after the end of each business year, in accordance with Article 12-6 (1) of the Act: |
| 1. | Titles, details, and periods of advertising or promotional events (including the case where expenses are partially executed in the relevant business year) held in the relevant business year; |
| 2. | An amount paid by the entire franchisees for advertising or promotional events in the relevant business year; |
| 3. | Expenses executed for each advertising or promotional event held in the relevant business year and the total amount borne by the franchisee. |
| (2) | Where the franchiser notifies a franchisee pursuant to paragraph (1), any of the methods specified under Article 6 (1) shall be applied mutatis mutandis: Provided, That the latter part of Article 6 (1) 3 shall not be applied mutatis mutandis. |
| (3) | Where a franchisee requests perusal of execution details under Article 12-6 (1) of the Act, the franchiser shall allow perusal of the relevant documents after determining the time and place therefor. |
[This Article Newly Inserted on Sep. 29, 2016]
| Article 14 (Grounds, etc. for Refusal to Renew Franchise Agreement) |
| 1. | Matters concerning the protection of intellectual property rights essential for the operation of a franchise of a franchiser; |
| 2. | Matters concerning the observance of education and training a franchiser conducts regularly for a franchisee: Provided, That where expenses for education and training a franchisee bears are clearly higher than expenses normally requested by another franchiser in the same type of business, this shall not apply thereto. |
| (2) | "Unavoidable causes prescribed by Presidential Decree" in the proviso to Article 13 (4) of the Act means where a franchiser or franchisee falls under any of the following cases: |
| 1. | Where a franchiser or franchisee files for bankruptcy or compulsory execution procedures or workout procedures on either of them begin; |
| 2. | Where bills or checks issued by a franchiser or franchisee are dishonored due to a default of payment, etc.; |
| 3. | Where a franchisee cannot operate a franchise any longer because significant personal reasons arise. |
[This Article Wholly Amended on Jan. 31, 2008]
| Article 15 (Reasons for Termination of Franchise Agreement) |
"Cases specified by Presidential Decree" in the proviso to Article 14 (1) of the Act means any of the following cases: <Amended on Jan. 31, 2008; Oct. 13, 2010; Mar. 30, 2015; Apr. 28, 2020> | 1. | Where a franchisee files for bankruptcy or compulsory execution procedures or workout procedures on the franchisee begin; |
| 2. | Where bills or checks that are issued by a franchisee are dishonored due to a default of payment, etc.; |
| 3. | Where a franchisee cannot operate a franchise any longer due to a natural disaster, significant personal reasons, etc.; |
| 4. | Where a franchisee is rendered any of the following administrative dispositions or court judgments in violation of any statute or regulation related to the operation of franchisees, which causes significant damage to the reputation or credibility of the franchiser, resulting in a serious obstacle to the franchise business: |
| (i) | An administrative disposition that the franchisee should correct such violation; |
| (ii) | An imposition of a penalty surcharge, administrative fine, etc. the reason for which such violation; |
| (iii) | An order to suspend business operation, the reason for which reason is such violation; |
| 5. | Deleted; <Apr. 28, 2020> |
| 6. | Where a franchisee receives an administrative disposition that does not allow the correction of its violation, such as the revocation of qualification, a license, permission, or an order to suspend business (where the franchisee receives an order to suspend business within 15 days, this shall not apply thereto), because it has violated a statute related to the operation of a franchised store: Provided, That where it receives a disposition for imposition of a penalty surcharge, etc. taking the place of an administrative punishment based on a statute, this shall not apply thereto; |
| 7. | Where a franchisee violates the same matter again within one year (in cases of the renewal of a franchise agreement or renewed franchise agreement, the period belonging to the previous period of contract shall be added up) from the date it corrected such matter in compliance with a franchiser's request pursuant to the main clause of Article 14 (1) of the Act: Provided, That where the franchiser has omitted a fact in a document requesting correction that if the franchisee violates the same matter within one year, a franchise agreement may be terminated without undergoing formalities referred to in Article 14 (1) of the Act, this shall not apply thereto; |
| 8. | Where a franchisee receives a criminal penalty for an act related to the operation of a franchised store; |
| 9. | Where a franchisee operates a franchised store by method or in the form that is likely to cause eminent risk to the health of the public, but it is difficult to wait for a corrective measure to be taken by a relevant administrative authority; |
| 10. | Where a franchisee suspends business for at least seven consecutive days without good cause. |
| Article 16 (Requests for Examination of Voluntary Code of Practice) |
Where a franchiser or trade association whose constituents are franchisers intends to request an examination of a voluntary code of practice pursuant to Article 15 (2) of the Act, it shall submit documents stating the following matters (including electronic documents; hereafter the same shall apply in Article 19), to the Fair Trade Commission: and a copy of the voluntary code of practice subject to a request for examination shall be submitted: <Amended on Apr. 28, 2020> | 1. | The name and address of an applicant for examination; |
| 2. | Background of the establishment of the voluntary code of practice; |
| 3. | The main points and the purport of the voluntary code of practice. |
| Article 16-2 (Franchisee Indemnity Insurance Contract, etc.) |
| (1) | A franchisee indemnity insurance contract, etc., a franchiser enters into pursuant to Article 15-2 (1) of the Act (hereinafter referred to as "indemnity insurance contract, etc."), shall satisfy the following requirements: |
| 1. | The indemnity insurance contract, etc. shall provide for compensation of losses sustained by a franchisee due to a franchiser's breach of duty, etc.; |
| 2. | The insured, creditor, or beneficiary shall be a franchisee who enters into, or plans to enter into, a franchise agreement with the relevant franchiser, or a person designated by the franchisee; |
| 3. | The contract amount shall be more than the deposited franchise fee; |
| 4. | The indemnity insurance contract, etc. shall not limit methods for the franchisee expressing its intention or put the onus of proof on the franchisee without good cause; |
| 5. | The indemnity insurance contract, etc. shall not limit the limits of compensation for losses or the responsibility of an insurer, guarantor, mutual aid association, or franchiser without good cause; |
| 6. | The term of contract shall exceed two months, and the indemnity insurance contract, etc. shall be easily terminated, without good cause, which will not give any disadvantage to the franchisee; |
| 7. | There shall be no stipulations in the indemnity insurance contract, etc. which may cause unpredictable danger or loss on the franchisee or be unreasonably unfavorable to him/her; |
| 8. | It shall be stipulated in the indemnity insurance contract, etc. that a franchisee who enters into, or plans to enter into, a franchise agreement with the relevant franchiser or a person designated by the franchisee may directly receive insurance, earnest money, or mutual aid fund. |
| (2) | In addition to matters referred to in paragraph (1), the Fair Trade Commission may determine and publicly notify detailed matters necessary for specific standards for the indemnity insurance contract, etc. according to the characteristics of a franchise the franchiser operates, the subject-matter covered for losses and procedures for making claims, the use of a cover page of the insurance, etc. |
[This Article Newly Inserted on Jan. 31, 2008]
| Article 16-3 (Approval, etc. for Mutual Aid Association) |
| (1) | Where franchisers intend to establish a mutual aid association under Article 15-3 (1) of the Act, at least ten franchisers shall be promoters, prepare the articles of association and apply for approval of the mutual aid association to the Fair Trade Commission following the resolution at the inaugural meeting. |
| (2) | Notwithstanding paragraph (1), when franchisers intend to establish a mutual aid association whose members are franchisers belonging to a specific type of business, franchisers may follow procedures under paragraph (1) if at least one tenth of the total number of franchisers belonging to the relevant type of business are promoters even though the number of promoters is less than ten. |
| (3) | When the Fair Trade Commission grants approval under paragraph (1), it shall publicly announce its approval for a mutual aid association. |
[This Article Newly Inserted on Jan. 31, 2008]
| Article 16-4 (Matters Included in Articles of Association of Mutual Aid Association) |
| 1. | The purpose of a mutual aid association; |
| 2. | The name of a mutual aid association; |
| 3. | The seat of the office of a mutual aid association; |
| 4. | Matters concerning money invested and a method for the payment thereof and the computation of the share thereof; |
| 5. | Matters concerning qualification for membership in a mutual aid association, joining and secession therefrom; |
| 6. | Matters concerning the rights and obligations of members of a mutual aid association; |
| 7. | Matters concerning assets and accounting; |
| 8. | Matters concerning general meetings; |
| 9. | Matters concerning the steering committee; |
| 10. | Matters concerning executive officers and employees; |
| 11. | Matters concerning financing; |
| 12. | Matters concerning affairs and the conduct thereof; |
| 13. | Matters concerning the amendment of the articles of association; |
| 14. | Matters concerning the dissolution of a mutual aid association and the disposal of the remaining property thereof; |
| 15. | Matters concerning methods of public announcements. |
[This Article Newly Inserted on Jan. 31, 2008]
| Article 16-5 (Operation and Supervision of Mutual Aid Association) |
| (1) | A mutual aid association shall settle accounts within two months after the end of each business year and submit annual accounts comprising a business report including the results of mutual aid, etc. in the relevant business year, a balance sheet and profit and loss statement to the Fair Trade Commission by March 31. |
| (2) | A mutual aid association shall retain the balance sheet and profit and loss statement submitted to the Fair Trade Commission pursuant to paragraph (1) in the main office (if a branch exists, including the branch) and publically announce the balance sheet. |
[This Article Newly Inserted on Jan. 31, 2008]
| Article 17 (Payment of Rewards) |
| (1) | A monetary reward under Article 15-5 (1) of the Act (hereafter in this Article, referred to as "monetary reward") shall be paid to a person who files a report or gives information on any violation subject to corrective measures under Article 33 (1) of the Act and submits evidential materials substantiating such fact for the first time: Provided, That a franchiser which has committed the relevant violation and an executive officer or employee of the same franchiser who is involved in the relevant violation shall be excluded herefrom. |
| (2) | Except in extenuating circumstances, the Fair Trade Commission shall pay a monetary reward within three months from the date on which it passes a resolution on the imposition of a disposition to take corrective measures, etc. (where an appeal is filed, referring to the date of adjudication) on the franchiser that is deemed committed the relevant act falling under a violation subject to corrective measures prescribed in Article 33 (1) of the Act. |
| (3) | Investigating officials involved in the payment of a monetary reward shall not provide or divulge any matter related to the report or information, such as the identity of the reporter or informant, to any other person. |
| (4) | Detailed guidelines for paying a monetary reward by type of violation shall be determined and publicly notified by the Fair Trade Commission, taking into account the seriousness of the violation, the level of evidence, etc. |
| (5) | The Fair Trade Commission may establish a monetary reward deliberation committee to deliberate on matters related to the payment of monetary rewards. |
| (6) | Matters concerning the establishment and operation of the monetary reward deliberation committee referred to in paragraph (5) and matters necessary for paying monetary rewards shall be determined and publicly notified by the Fair Trade Commission. |
[This Article Newly Inserted on Jul. 10, 2018]
| Article 18 (Meetings of Council) |
| (1) | Under Article 16 of the Act , when the chairperson of the Franchise Dispute Mediation Council (hereinafter referred to as the "Council") convenes a plenary meeting specified in Article 19 (1) of the Act or any member who represents public interests convenes a subordinate meeting under the same paragraph, he/she shall notify in writing related members of the Council of the date, time, place and items on the agenda for such meeting by no later than seven days before the meeting: Provided, That in cases of emergency, this shall not apply. <Amended on Jan. 31, 2008> |
| (2) | No content of any meeting of the Council shall be disclosed: Provided, That when the chairperson of the Council deems it necessary, he/she may have the disputing parties and other interested persons attend the meeting. |
| Article 19 (Application for Mediation of Disputes) |
| (1) | A person who intends to apply for the mediation of a dispute pursuant to Article 22 (1) of the Act shall submit to the Council a document stating the following matters: <Amended on Dec. 18, 2018> |
| 1. | The names and addresses of the applicant and the respondent (if a disputing party is a corporation, referring to the name of the corporation, the location of its main office, and the name and address of its representative); |
| 2. | Where an agent is appointed, the name and address of the agent; |
| 3. | Reasons for application; |
| 4. | Where the disputing party has filed an application for dispute mediation on the same matter with a different council, the fact thereof; |
| 5. | Where the fact that an application for the mediation of a dispute has been filed for the same issue by the other disputing party pursuant to Article 22 (4) of the Act, such fact. |
| (2) | The written application prescribed in the provisions of paragraph (1) shall be accompanied by any of the following documents: |
| 1. | Documents verifying the causes of such application and the facts related thereto; |
| 2. | Where a person’s agent files an application, the agent’s power of attorney; |
| 3. | Other evidentiary documents or materials that are necessary for dispute mediation. |
| Article 20 (Selection of Representatives) |
| (1) | When several people jointly apply for mediation of a dispute, they may select three or fewer representatives from among the applicants. |
| (2) | Where applicants fail to select representatives pursuant to paragraph (1), the chairperson of the Council may recommend them to select representatives. |
| (3) | Where applicants change representatives, they shall notify the chairperson of the Council of such change. |
| Article 21 (Supplement, etc. to Application for Mediation of Disputes) |
| (1) | If deemed necessary to supplement an application for mediation of a dispute under Article 19, the chairperson of the Council shall request an applicant to make such supplementation within a reasonable fixed period. |
| (2) | A period taken to supplement an application under paragraph (1) shall not be included in the period under Article 23 (4) 2 of the Act. <Amended on Sep. 29, 2016> |
| Article 21-2 (Initiation of Dispute Mediation Procedure) |
Where the Council initiates a dispute mediation procedure under Article 23 (1) of the Act, it shall notify the disputing parties of the mediation number, mediation commencement date, etc., without delay and record the disputing parties and the dispute’s specific details on its management register. [This Article Newly Inserted on Sep. 29, 2016]
| Article 22 Deleted. <Apr. 28, 2020> |
| Article 23 (Termination of Dispute Mediation) |
| (1) | Where mediation is rejected or the procedure thereof is terminated pursuant to Article 23 (5) of the Act, the Council shall prepare a written statement on termination of dispute mediation accompanied with a copy thereof and report such fact according to the following category: <Amended on Apr. 28> |
| 2. | Where the Council established under a City/Do: Report to the Fair Trade Commission and the relevant Mayor/Do Governor, respectively. |
| (2) | The Council shall mention the following in a written statement on termination of dispute mediation under paragraph (1): <Amended on Apr. 28, 2020> |
| 1. | The address and name of the applicant for mediation; |
| 2. | An outline of the dispute subject to mediation: |
| (a) | The general status of the parties to the franchise business transactions; |
| (b) | An outline of the franchise business transactions; |
| (c) | The details of the dispute; |
| (d) | The point at issue in mediation (to state opinions of the parties to the franchise business transactions); |
| 3. | Reasons for the rejection of the application for mediation or the termination of the procedure of mediation (to be stated in detail for each reason provided in the subparagraphs of Article 23 (3) and (4) of the Act). |
[This Article Wholly Amended on Dec. 18, 2018]
| Article 24 (Confirmation of Fact on Disputing Parties, etc.) |
| (1) | When the Council intends to request the disputing parties to attend pursuant to Article 23 (6) of the Act, it shall notify the disputing parties of the time and place fixed by no later than seven days before the date of requested attendance: Provided, That in cases of emergency or a person given notice of attendance consents, this shall not apply. <Amended on Sep. 29, 2016> |
| (2) | Where a disputing party given notice under paragraph (1) is in unavoidable circumstances that do not allow him/her to attend a meeting of the Council, he/she may submit his/her written opinion in advance. |
| Article 25 (Mediation of Disputes) |
Where the mediation of a dispute under Article 24 (1) of the Act is materialized, the Council shall prepare a protocol of mediation mentioning the following matters and report the result of mediation to the Fair Trade Commission accompanied with a copy thereof: | 1. | The address and name of the applicant for mediation; |
| 2. | An outline of the dispute subject to mediation: |
| (a) | The general status of the parties to the franchise business transactions; |
| (b) | An outline of the franchise business transactions; |
| (c) | The details of the dispute; |
| (d) | The point at issue in mediation (to state opinions of the parties to the franchise business transactions); |
| 3. | The results of medication (to be stated for each point by issue in mediation). |
| Article 26 (Succession to Position of Disputing Parties) |
| (1) | Where a disputing party cannot continue the proceedings for mediation due to his/her death or loss of capacity or for other reasons before the proceedings for mediation is terminated, the Council may have a person who has succeeded to his/her position pursuant to a statute succeed to the position of the party to mediation. |
| (2) | A person who intends to succeed to the position of a disputing party pursuant to paragraph (1) shall apply for such succession to the Council in writing. |
| (3) | When the Council receives an application under paragraph (2), it shall examine such application without delay and decide on whether to allow an applicant to succeed to the position of a disputing party, and notify the applicant of the content thereof in writing. |
| Article 27 (Notification of Instituting Lawsuit, etc.) |
When a disputing party institutes a lawsuit regarding the relevant issue after applying for mediation of the dispute or consents to arbitration under Article 8 of the Arbitration Act, he/she shall notify the Council of such fact without delay. <Amended on Jan. 31, 2008; Sep. 29, 2016>
| Article 27-2 (Detailed Rules for Operation of Council) |
In addition to matters provided for in this Decree, the chairperson of the Council shall determine matters necessary for the formation, operation, proceedings for mediation, etc. of the Council following the deliberation and resolution of the Council.
[This Article Newly Inserted on Jan. 31, 2008]
| Article 28 (Franchise Trader Qualifying Examinations) |
| (1) | The Fair Trade Commission shall conduct a franchise trader qualifying examination (hereinafter referred to as "examination") under Article 27 of the Act divided into the preliminary examination and secondary examination, offered at least once a year. <Amended on Jan. 31, 2008> |
| (2) | When the Fair Trade Commission intends to conduct an examination, it shall publicly announce necessary matters, such as the date, time, place, methods, subjects, qualification to sit examination, procedures for application, etc. of the examination in general daily newspapers, etc. which register the whole country as their distribution area pursuant to Article 9 (1) of the Act on the Promotion of Newspapers, Etc. three months before the date of conducting the examination. <Amended on Jan. 31, 2008; Jan. 27, 2010; May 7, 2012; Apr. 28, 2020> |
| (3) | Only a person who has passed, or is exempt from, the preliminary examination may apply for the secondary examination. |
| (4) | Methods of examination shall be as follows: |
| 1. | The preliminary examination shall be a multiple choice examination and some fill-in-the-blank type questions may be included; |
| 2. | The secondary examination shall be an essay-type examination and some fill-in-the-blank type questions may be included. |
| (5) | The subjects for the preliminary examination and secondary examination shall be as specified in attached Table 3. |
| (6) | Persons who have passed the preliminary examination shall be exempted from the preliminary examination for the qualifying examination on the next occasion only. |
| (7) | A person who passes an examination shall be a person who has scored 40 or more points for each subject out of 100 points for each subject and scored 60 or more points on the average of all the subjects. |
| (8) | When persons who have passed an examination are decided, the Fair Trade Commission shall publish such persons in the Official Gazette and issue a certificate to such persons. |
| (9) | Deleted. <Sep. 29, 2016> |
| (10) | The Committee on Franchise Trader Examination may be established in the Fair Trade Commission in order to deliberate on matters necessary to conduct examinations, such as qualification for applying for an examination, methods of examination, making questions for examination and decision of successful applicants. <Amended on Jan. 31, 2008> |
| (11) | The Fair Trade Commission shall determine and publicly notify other matters necessary for the administration of examinations. |
[This Article Wholly Amended on Mar. 22, 2004]
| Article 29 (Examination Fees) |
| (1) | A person who intends to apply for an examination shall pay an examination fee in the amount determined by the Fair Trade Commission. |
| (2) | Where a person who has paid an examination fee under paragraph (1) withdraws his/her application for an examination, the Fair Trade Commission shall fully or partially refund the examination fee. <Amended on Jan. 31, 2008> |
| (3) | The Fair Trade Commission shall determine and publicly notify matters necessary to refund examination fees. <Newly Inserted on Jan. 31, 2008> |
[This Article Wholly Amended on Mar. 22, 2004]
| Article 29-2 Deleted. <Mar. 22, 2004> |
| Article 30 (On-The-Job Training for Franchise Traders) |
| (1) | The period of on-the-job training for franchise traders shall be 100 or more hours. <Amended on Jan. 31, 2008> |
| (2) | The Fair Trade Commission shall determine and publicly notify the specific content, period and method of on-the-job training. |
[This Article Wholly Amended on Mar. 22, 2004]
| Article 31 (Issuance of Certificates) |
| (1) | The Fair Trade Commission shall issue a certificate to a person who is qualified as a franchise trader. <Amended on Jan. 31, 2008> |
| (2) | The Fair Trade Commission shall determine and publicly notify matters necessary to issue a certificate for a franchise trader. <Amended on Jan. 31, 2008> |
[This Article Wholly Amended on Mar. 22, 2004]
| Article 32 (Registration, etc. of Franchise Traders) |
| (1) | A person who intends to register as franchise trader pursuant to Article 29 (1) of the Act shall submit to the Fair Trade Commission an application for registration as determined by the Fair Trade Commission. <Amended on Jan. 31, 2008> |
| (2) | When the Fair Trade Commission receives an application for registration under paragraph (1), it shall enter the following matters in the register of franchise traders and issue a certificate of registration to an applicant: <Amended on Jan. 31, 2008> |
| 1. | The name, address, and resident registration number of a franchise trader; |
| 2. | The name and seat of the office; |
| 4. | Other matters determined by the Fair Trade Commission. |
| (3) | Where a person who has registered as franchise trader misplaces a certificate of registration issued pursuant to paragraph (2) or such certificate of registration is defaced, he/she shall submit an application for re-issuance to the Fair Trade Commission. <Amended on Jan. 31, 2008> |
| (4) | Where a franchise trader finds a misplaced certificate of registration after he/she was reissued a certificate of registration pursuant to paragraph (3), he/she shall return the misplaced certificate of registration without delay. |
| (5) | The Fair Trade Commission shall determine and publicly notify other detailed matters necessary for the registration of franchise traders and the renewal of registration. <Newly Inserted on Jan. 31, 2008> |
| Article 32-2 (Criteria for Designation of Educational Institutions) |
"Standards for facilities, human resources, and provision of education prescribed by Presidential Decree" in Article 31-2 (2) of the Act shall be as specified in attached Table 4. [This Article Newly Inserted on Jan. 31, 2008]
| Article 32-3 (Reports on Violations and Notification of Reports) |
| (1) | Any person who intends to file a report under the former part of Article 32-3 (1) of the Act shall submit a document including the following matters (including electronic documents; hereafter the same shall apply in this Article) to the Fair Trade Commission: Provided, That he/she may report orally in the event of an emergency or unavoidable circumstance: |
| 1. | The name and address of the reporting person; |
| 2. | The name or title (in cases of corporations, including the names of the representatives thereof) and address of the franchiser or the master franchisee; |
| 3. | Details of the offense and evidential materials. |
| (2) | The Fair Trade Commission shall, within 15 days from the date of receipt of a report referred to in paragraph (1), issue or send a document to verify whether the reporting person agrees to each of the following cases, directly to the reporting person: |
| 1. | Whether agreeing to notifying the franchiser or master franchisee of the fact that the Fair Trade Commission has received the report; |
| 2. | Where giving notice pursuant to subparagraph 1, whether agreeing to including the reporting person and the details of the report in the notice. |
| (3) | Every reporting person shall notify the Fair Trade Commission in writing of whether he/she agrees to each of the subparagraphs of paragraph (2), within 15 days from the date he/she receives a document issued or sent under paragraph (2), excluding its subparagraphs, and where he/she fails to make such notice within the said period, he/she shall be considered disagreeing thereto. |
| (4) | Where the Fair Trade Commission receives a notice of agreement from a reporting person under paragraph (3), it shall issue or send a document including the fact that it has received the report, the reporting person and the details of the report, directly to the franchiser or master franchisee within seven days from the date such notice is received. |
[This Article Newly Inserted on Mar. 20, 2017]
[Previous Article 32-3 moved to Article 32-4 <Mar. 20, 2017>]
| Article 32-4 (Methods of Publication on Receipt of Corrective Orders) |
| (1) | Where the Fair Trade Commission intends to issue an order to publish the receipt of a corrective order, to the relevant franchiser pursuant to Article 33 (3) of the Act, it shall order in determination of details of contents on such publication; the kinds and number of media; the size of paper, considering the following: |
| 1. | Details and severity of violation; |
| 2. | Period and frequency of violation. |
| (2) | Where the Fair Trade Commission intends to issue an order to publish the receipt of a corrective order under paragraph (1), it may allow the relevant franchiser to consult with the Fair Trade Commission concerning the draft, etc. |
[This Article Newly Inserted on Jan. 6, 2015]
[Moved from Article 32-4 <Mar. 20, 2017>]
| Article 33 (Procedures for Recommendation of Correction) |
The Fair Trade Commission shall make recommendations for correction under Article 34 (1) of the Act in writing, specifying the following matters: | 1. | The details of violation of an Act; |
| 3. | Time limit for correction; |
| 4. | The period for notifying whether a recommendation is accepted; |
| 5. | Measures to be taken when a franchiser refuses to accept a recommendation. |
| Article 34 (Methods of Computing Penalty Surcharges) |
| (1) | "Sales prescribed by Presidential Decree" in the main clause of Article 35 of the Act means sales of goods or services sold to relevant franchisees or prospective franchisees by the relevant franchiser during the period of violation (referring to the period from the date of commencement of a violation until to the date of ending such violation) or the amount equivalent thereto (hereinafter referred to as "relevant sales"). <Amended on Feb. 11, 2014> |
| (2) | "Business entities prescribed by Presidential Decree" in the main clause of Article 35 (1) of the Act means business entities that mention the total amount of consideration for goods or services as operating income in financial statements, etc. <Newly Inserted on Feb. 11, 2014> |
| (3) | "Cases prescribed by Presidential Decree" in the proviso to Article 35 (1) of the Act means any of the following: <Newly Inserted on Feb. 11, 2014> |
| 1. | Where business has not been performed due to the suspension of business, etc.; |
| 2. | Where it is difficult to calculate the relevant sales because the period of violation, etc. cannot be determined; |
| 3. | Where it is difficult to calculate the objective sales because data for the calculation of sales have disappeared or have been destroyed due to a disaster, etc. |
| (4) | Standards for imposing penalty surcharges under Article 35 (1) of the Act shall be as specified in attached Table 4-2. <Newly Inserted on Feb. 11, 2014> |
| (5) | The Fair Trade Commission shall determine and publicly notify other detailed matters necessary for procedures for imposing penalty surcharges. <Amended on Feb. 11, 2014> |
[This Article Wholly Amended on Jan. 31, 2008]
| Article 35 (Delegation of Authority) |
Pursuant to Article 39 (1) of the Act, the Fair Trade Commission shall delegate the authority to impose administrative fines on, and collect such fines from, the franchisers having registered information disclosure statements with Mayors/Do Governors pursuant to Article 5-2 of this Decree, among administrative fines prescribed in Article 43 (6) 1 and (7) 1 of the Act. [This Article Newly Inserted on Dec. 18, 2018]
| Article 36 (Entrustment of Business Affairs) |
| (1) | The Fair Trade Commission may entrust business affairs concerning the registration, refusal of the registration and disclosure of an information disclosure statement, to the Mediation Agency or an institution the Fair Trade Commission deems capable of conducting the relevant affairs and publicly notifies from among corporations and organizations specialized in the franchising field. <Amended on May 7, 2012; Dec. 18, 2018> |
[This Article Wholly Amended on Jan. 31, 2008]
[Title Amended on May 7, 2012]
| Article 36-2 (Processing of Personally Identifiable Information) |
Where it is inevitable to conduct the following affairs, the Fair Trade Commission (including a person who has been delegated the authority of the Fair Trade Commission under Article 36) may process data including resident registration numbers under subparagraph 1 of Article 19 of the Enforcement Decree of Personal Information Protection Act or foreign registration numbers under subparagraph 4 of the same Article: <Amended on Jan. 6, 2015> | 1. | Affairs concerning registration, registration of modification, and reporting of modification under Article 6-2 (1) and (2); |
| 1-2. | Affairs concerning the revocation of registration of and the suspension of qualification for franchise traders under Article 31 of the Act; |
| 2. | Affairs concerning qualifying examinations for franchise traders under Article 28; |
| 3. | Affairs concerning on-the-job training for franchise traders under Article 30; |
| 4. | Affairs concerning the issuance of certificates for franchise traders under Article 31; |
| 5. | Affairs concerning the registration of franchise traders, etc. under Article 32. |
[This Article Newly Inserted on Jan. 6, 2012]
| Article 36-3 (Regulatory Review) |
| (1) | The Fair Trade Commission shall take measures, such as making improvements, after reviewing the validity of reasons for the termination of a franchise agreement under Article 15, every five years (referring to the period before January 1 of every fifth anniversary) on the basis of January 1, 2014. <Amended on Feb. 11, 2014> |
| (2) | The Fair Trade Commission shall take measures, such as making improvements, after reviewing the validity of the following matters every three years (referring to the period that ends on the day before the base date of every third anniversary) on the basis of the following base date: <Newly Inserted on Dec. 12, 2017; Dec. 18, 2018> |
| 1. | Criteria for exclusion of application of the Act under Article 5: January 1, 2017; |
| 2. | Documents to be submitted when registering an information disclosure statement under Article 5-2 (1) and (2): January 1, 2017; |
| 3. | Deleted; <Mar. 3, 2020> |
| 4. | Deleted; <Mar. 3, 2020> |
| 5. | Deleted; <Mar. 3, 2020> |
| 6. | The range of estimated sales under Article 9 (3) and (4): January 1, 2017; |
| 7. | Deleted; <Mar. 3, 2020> |
| 8. | Deleted; <Mar. 3, 2020> |
| 9. | Deleted; <Mar. 3, 2020> |
| 10. | Deleted; <Mar. 3, 2020> |
| 11. | Deleted; <Mar. 3, 2020> |
| 12. | Period of on-the-job training for franchise traders under Article 30 (1): January 1, 2017. |
| (3) | Deleted. <Dec. 12, 2017> |
[This Article Newly Inserted on Dec. 30, 2013]
| Article 37 (Criteria for Imposition of Administrative Fines) |
[This Article Wholly Amended on Feb. 11, 2014]
ADDENDUM <Presidential Decree No. 17773, Nov. 6, 2002>
This Decree shall enter into force on the date of its promulgation.
ADDENDUM <Presidential Decree No. 18000, Jun. 13, 2003>
This Decree shall enter into force on the date of its promulgation.
ADDENDUM <Presidential Decree No. 18331, Mar. 22, 2004>
This Decree shall enter into force on the date of its promulgation.
ADDENDA <Presidential Decree No. 20594, Jan. 31, 2008>
Article 1 (Enforcement Date)
This Decree shall enter into force on February 4, 2008: Provided, That the amended provisions of Articles 5-6 through 5-8 shall enter into force six months after the date of its promulgation. Article 2 (Applicability to Franchisee Fees)
The amended provisions of Article 3 shall apply from the first franchise fee paid after this Decree enters into force. Article 3 (Applicability to Matters Included in Franchise Agreement)
The amended provisions of Article 12 shall apply from the first franchise agreement entered into or renewed after this Decree enters into force. Article 4 (Applicability to Refusal, etc. to Renew Franchise Agreement)
The amended provisions of Article 14 shall apply from the first franchise agreement entered into or renewed after this Decree enters into force. Article 5 (Applicability to Restrictions on Termination of Franchise Agreement)
The amended provisions of Article 15 shall apply from the first franchise agreement terminated due to breach thereof after this Decree enters into force. Article 6 (Applicability to Period for On-The-Job Training for Fair Trade Experts)
The amended provisions of Article 30 shall apply from the first person who passes a qualifying examination for franchise traders after this Decree enters into force. Article 7 (Applicability to Amendment of Subjects for Examination)
The amended provisions on the subjects for examination of attached Table 3 shall apply from the first examination conducted on and after January 1, 2009.
Article 8 (Special Cases concerning Details of Information Disclosure Statement)
Notwithstanding the amended provisions of Article 4 and attached Table 1, a franchiser may provide the former information disclosure statement up to six months from the date this Decree enters into force. Article 9 (Special Cases concerning Providing Information Disclosure Statements)
Notwithstanding the amended provisions of Article 6 (4), no franchiser may provide documents on stores near a predetermined location for a franchisee's future store, up to six months from the date this Decree enters into force. Article 10 Deleted. <by Presidential Decree No. 22446, Oct. 13, 2010>
ADDENDA <Presidential Decree No. 20947, Jul. 29, 2008>
Article 1 (Enforcement Date)
This Decree shall enter into force on February 4, 2009. (Proviso Omitted.)
Articles 2 through 28 Omitted.
ADDENDA <Presidential Decree No. 22003, Jan. 27, 2010>
Article 1 (Enforcement Date)
This Decree shall enter into force on February 1, 2010.
Articles 2 through 5 Omitted.
ADDENDA <Presidential Decree No. 22151, May 4, 2010>
Article 1 (Enforcement Date)
This Decree shall enter into force on May 5, 2010.
Articles 2 through 4 Omitted.
ADDENDA <Presidential Decree No. 22446, Oct. 13, 2010>
Article 1 (Enforcement Date)
This Decree shall enter into force three months after the date of its promulgation: Provided, That the amended provisions of Articles 5 and 5-7 shall enter into force on the date of its promulgation. Article 2 (Applicability to Matters Included in Franchise Agreement)
The amended provisions of Article 12 shall apply from the first franchise agreement entered into or renewed after this Decree enters into force. Article 3 (Applicability to Restrictions on Termination of Franchise Agreement)
The amended provisions of Article 15 shall apply from where the first ground for termination of a franchise agreement arises after this Decree enters into force. Article 4 (Special Cases concerning Registration of Information Disclosure Statements)
Where a franchiser intends to modify matters included in subparagraphs 2 (f) and (h) and 3 (c) through (f) and (g) (iii) and (h) of attached Table 1 after this Decree enters into force, the Fair Trade Commission may perform procedures for registration within 30 days, notwithstanding the amended provisions of Article 5-3 (2). Article 5 (Transitional Measures concerning Guidelines for Imposing Administrative Fines)
When the guidelines for imposing an administrative fine apply to an act committed before this Decree enters into force, the precedents shall be followed.
ADDENDA <Presidential Decree No. 23169, Sep. 29, 2011>
Article 1 (Enforcement Date)
This Decree shall enter into force on Sep. 30, 2011. (Proviso Omitted.)
Articles 2 through 8 Omitted.
ADDENDA <Presidential Decree No. 23488, Jan. 6, 2012>
Article 1 (Enforcement Date)
This Decree shall enter into force on the date of its promulgation. (Proviso Omitted.)
Article 2 Omitted.
ADDENDA <Presidential Decree No. 23644, Feb. 29, 2012>
Article 1 (Enforcement Date)
This Decree shall enter into force on the date of its promulgation. (Proviso Omitted.)
Articles 2 through 4 Omitted.
ADDENDA <Presidential Decree No. 23775, May 7, 2012>
Article 1 (Enforcement Date)
This Decree shall enter into force on May 18, 2012.
Article 2 (Applicability to Amendment of Public Announcement of Examination)
The amended provisions of Article 28 (2) shall apply from the first examination conducted on and after January 1, 2013. Article 3 (Special Cases on Details of Information Disclosure Statements)
Notwithstanding the amended provisions of attached Table 1, a franchiser may provide the former information disclosure statement until it files the first application for registration, or reporting, of modification to an information disclosure statement referred to in Article 6 (1) after this Decree enters into force.
ADDENDUM <Presidential Decree No. 25050, Dec. 30, 2013>
This Decree shall enter into force on January 1, 2014. (Proviso Omitted.)
ADDENDA <Presidential Decree No. 25175, Feb. 11, 2014>
Article 1 (Enforcement Date)
This Decree shall enter into force on February 14, 2014: Provided, That the amended provisions of Article 13-4 shall enter into force on August 14, 2014. Article 2 (Transitional Measures concerning Methods, etc. of Calculation of Penalty Surcharges)
Where the Fair Trade Commission imposes penalty surcharges on offenses that are committed before this Decree enters into force, the former provisions of Article 34 and Article 4-2 of attached Table shall apply to the imposition of penalty surcharges on such offenses notwithstanding the amended provisions of Article 34 and Article 4-2 of attached Table.
ADDENDA <Presidential Decree No. 25840, Dec. 9, 2014>
Article 1 (Enforcement Date)
This Decree shall enter into force on January 1, 2015.
Articles 2 through 16 Omitted.
ADDENDA <Presidential Decree No. 26034, Jan. 6, 2015>
Article 1 (Enforcement Date)
This Decree shall enter into force on the date of its promulgation: Provided, That the amended provisions of Article 32-3 shall enter into force three months after the date of its promulgation. Article 2 (Applicability concerning Applications for Registration of Modification)
The amended provisions of attached Table 1-2 shall apply where a franchiser as an individual business person who prepares a financial statement, even if 120 days have not elapsed after the immediately preceding business year has finished at the time this Decree enters into force, files an application for registration of modification to an information disclosure statement after this Decree enters into force.
ADDENDA <Presidential Decree No. 26176, Mar. 30, 2015>
Article 1 (Enforcement Date)
This Decree shall enter into force on the date of its promulgation.
Article 2 (Applicability concerning Reasons for Termination of Franchise Agreement)
The amended provisions of subparagraph 4 (b) of Article 15 shall apply where a franchisee has violated a statute related to the operation of a franchised store after this Decree enters into force.
ADDENDA <Presidential Decree No. 27528, Sep. 29, 2016>
Article 1 (Enforcement Date)
This Decree shall enter into force on September 30, 2016.
Article 2 (Applicability concerning Matters Included in Information Disclosure Statements)
The amended provisions of attached Table 1 shall apply from beginning with the first registration of an information disclosure statement or registration of modification thereof after this Decree enters into force.
Article 3 (Applicability concerning Registration of Modification of Information Disclosure Statements)
The amended provisions of attached Table 1-2 shall apply from beginning with the first grounds for modification after this Decree enters into force.
Article 4 (Transitional Measures concerning Notification of Registration of Modification)
| (1) | The former provisions shall apply, notwithstanding the amended provisions of Article 5-3 (9), where a franchiser registers a modified information disclosure statement before this Decree enters into force. |
| (2) | The former provisions shall apply, notwithstanding the amended provisions of Article 5-3 (10), where a franchisee requests the franchiser for the information disclosure agreement whose modification has been registered, before this Decree enters into force. |
Article 5 (Transitional Measures concerning Suspension of Qualification to Apply for Franchise Trader Examination)
The former provisions shall apply to a person who engages in cheating before this Decree enters into force, notwithstanding the amended provisions of Article 28 (9).
ADDENDA <Presidential Decree No. 27751, Dec. 30, 2016>
Article 1 (Enforcement Date)
This Decree shall enter into force on January 1, 2017. (Proviso Omitted.)
Articles 2 through 12 Omitted.
ADDENDA <Presidential Decree No. 27946, Mar. 20, 2017>
Article 1 (Enforcement Date)
This Decree shall enter into force on March 21, 2017.
Article 2 (Applicability to Notification of Reports on Violations)
The amended provisions of Article 32-3 (2) through (4) shall apply starting from the first report the Fair Trade Commission receives after this Decree enters into force.
ADDENDA <Presidential Decree No. 28471, Dec. 12, 2017>
Article 1 (Enforcement Date)
This Decree shall enter into force on January 1, 2018.
Article 2 Omitted.
ADDENDA <Presidential Decree No. 28786, Apr. 3, 2018>
Article 1 (Enforcement Date)
This Decree shall enter into force on the date of its promulgation: Provided, That the amended provisions of attached Table 1 shall enter into force on January 1, 2019.
Article 2 (Applicability to Matters to Be Included in Information Disclosure Statements)
The amended provisions of attached Table 1 shall begin applying to cases where the registration or registration for change of information disclosure statements is filed pursuant to Article 6-2 of the Act after the enforcement date prescribed in the proviso to Article 1 of Addenda.
ADDENDA <Presidential Decree No. 29043, Jul. 10, 2018>
Article 1 (Enforcement Date)
This Decree shall enter into force on July 17, 2018: Provided, That the amended provisions of Article 37 and subparagraph 2 (i) through (n) of attached Table 5 shall enter into force on October 18, 2018. Article 2 (Transitional Measures concerning Criteria for Imposition of Administrative Fines)
Dispositions to impose an administrative fines received due to a violation committed prior to the enforcement date prescribed in the proviso to Article 1 of the Addenda shall not be included in the calculation of number of violations under the amended provisions of subparagraph 2 (i) through (n) of attached Table 5.
ADDENDA <Presidential Decree No. 29392, Dec. 18, 2018>
Article 1 (Enforcement Date)
This Decree shall enter into force on January 1, 2019.
Article 2 (Applicability to Matters to be Modified in Information Disclosure Statements and Time Limit for Modification Thereof)
The amended provisions of attached Table 1-2 shall apply from beginning the first cases where modification of any information disclosure statement is registered pursuant to Article 6-2 (2) of the Act after this Decree enters into force.
ADDENDA <Presidential No. 30509, Mar. 3, 2020>
This Decree shall enter into on the date of its promulgation.
ADDENDA <Presidential No. 30649, Apr. 28, 2020>
Article 1 (Enforcement Date)
This Decree shall enter into force on the date of its promulgation: Provided, That the amended provisions of attached Tables 1 and 1-2 shall enter into force on January 1, 2021.
Article 2 (Applicability concerning Registration of Modification of Information Disclosure Statement)
| (1) | The amended provisions of subparagraph 3 (h) of attached Table 1 and the provisions related thereto of attached Table 1-2 shall also apply where the immediately preceding business year of a franchiser ends on December 31, 2020. In such cases, the deadline for registration of modification is April 30, 2021 (where a franchiser which is an individual business operator that prepares financial statements, referring to June 29, 2021). |
| (2) | The amended provisions of subparagraph 8 (e) of attached Table 1 and the provisions related thereto of attached Table 1-2 shall also apply where a franchiser operates a business support system even after the enforcement date specified in the proviso of Article 1 of these Addenda, starting from the enforcement date under the proviso to Article 1 of the Addenda. In such cases, reasons for modification shall be deemed occurred in the quarter in which the enforcement date specified in the proviso of Article 1 of these Addenda falls. |