McDonald’s Korea caught in franchise dispute

McDonald’s Korea has become mired in a high-profile dispute with a franchisee.

The local arm of the US restaurant operator terminated the franchise agreement with McDonald’s Mangwon branch on December 1 of last year. According to McDonald’s, the restaurant owner had been failing to fulfill the terms of agreement, including paying the company franchise commissions amounting to a total of about 700 million won ($586,264).

The owner retaliated by claiming he suffered losses from another McDonald’s restaurant opening nearby, refused to pay the overdue amount and shuttered the restaurant on December 4 after firing some 60 employees who were owed 50-million-won ($41,865) in unpaid wages.

This week, former employees and members of the Alba Organization, Korea’s labor union for part-time workers, protested in front of the now-closed Mangwon outlet, affixing signs festooned with angry slogans to the front of the building.

In an official statement, the Alba Organization demanded that McDonald’s advance the overdue wages and severance pay to the former employees, then demand indemnity from the owner. It also requested that the company provide jobs to employees who wish to continue working at McDonald’s.

“For part-timers, wages are essential to survival. We demand that McDonald’s resolve this matter as soon as possible,” said a spokesperson.

McDonald’s Korea responded by saying  it was doing its best to help the employees, and claimed to have already hired 19 of the former Mangwon outlet workers at other McDonald’s restaurants.

However, as for unpaid wages, officials said, “we need the work data for the part-timers to pay their overdue wages, but only the owner can access the data,” adding that “trying to access the information without the owner’s consent is a violation of the law.”




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