7-Eleven South Korea tops franchisee-dispute tally
7-Eleven South Korea has run up the greatest number of formal disputes between head office and franchisees of any franchise business in the country.
According to parliamentary audit files submitted to Rep Cho Bae-sook of the Party for Democracy and Peace, there were 498 dispute cases regarding convenience stores filed at the Korea Fair Trade Mediation Agency between 2014 and September of this year.
The disputes were between individual franchise owners of convenience stores and the head offices of major convenience-store chains.
A breakdown by year showed the total number of cases against 7-Eleven South Korea dropped from 107 in 2014 to 55 in 2015 and 60 cases in 2016. But last year, the number of disputes skyrocketed, more than doubling to 130 cases.
This year alone, as of September, 146 dispute cases have been filed with the Mediation Agency.
The greatest number of complaints were regarding false or exaggerated information, with 74 cases, followed by 32 cases of forced compensation of damages, 31 cases of unfair use of authority, 24 cases of business zone infringement, and 21 cases regarding privacy issues.
Of all convenience store operators in South Korea, 7-Eleven had the greatest number of complaints with 172 cases within the last five years. However, only 109 cases have been moderated, as seven of the 63 cases were found invalid.
The remaining 48 cases have been cancelled or terminated, leaving the number of ongoing pending cases at seven.
Other convenience store operators such as Ministop, CU and GS25 have also had complaints filed against them over the last five years, with 119 cases, 98 cases and 40 cases, respectively.
Cho said franchise store owners have been pushed to the edge by convenience store head offices.
“A special measure must be created to root out the unfair practices that are ongoing in the industry,” said the lawmaker.
- Original reporting by Ashley Song of Korea Bizwire.