The Fair Trade Commission of Korea (“KFTC”) implemented in April 2018 rules governing the review of digital evidence in investigations of businesses at the KFTC. The rules are entitled the Regulations on Collection, Analysis and Management of Digital Evidence (“Digital Forensic Evidence Review Rules”). The rules have changed the manner of executing investigations at the KFTC in cases where the KFTC perceives a need for a detailed forensic audit. As of 2017, the KFTC has engaged in digital investigations via a division named the “Digital Investigation and Analysis
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Korean FTC Criminal Referral Guidelines: Monopoly & Franchise Korean Law Updates
The Fair Trade Commission of Korea (“Korean FTC” or “KFTC”) amended the Korean FTC’s Criminal Referral Guidelines (“Amended Guidelines”) to motivate more active and aggressive enforcement of Korea’s Franchise, Monopoly and other related laws. We have seen a much more active enforcement of Korean law by the Korean FTC and expect more criminal referrals. The Amended KFTC’s Criminal Referral Guidelines places a very low threshold for referring a case for a criminal prosecution of employees and companies. The Amended Guidelines are effective since April 9, 2018. Prior
Continue readingBarriers to Trade in the Korean Franchising Industry
The Office of the United States Trade Representative issues an annual report that details issues that concern the ability of United States companies to do business abroad. One interesting component of the this report, that may concern some international franchise systems in Korea, is addressed in the report. The 2018 National Trade Estimate Report on Foreign Trade Barriers notes under Korean Franchising that: “U.S. stakeholders have raised concerns for several years about the activities of the National Commission on Corporate Partnership, now renamed the Korea Commission on Corporate Partnership
Continue readingPrivity of Contract in Franchise Agreements in Korea: Korean Franchise Law Updates
Normally, in Korea, a contract/agreement cannot confer rights nor impose obligations upon a person who is no a party to the contract/agreement. One interesting case, in franchise law, applied this principle to the benefit of the franchisor and the detriment to a supplier. A Supplier delivered food through a Distributor to a Franchisee based on a franchisee requirement iterated in a franchise agreement with a franchisor. The case brings to light, also, the potential liability of franchisors for acts of Korean franchisees. The dispute occurred, of course, since the Supplier
Continue readingKorean Franchisors’ Obligations in Korea to File Annual Report to Korean FTC
Korea’s Franchise Law imposes an obligation to report to the Fair Trade Commission of Korea, yearly, specific information relating to your franchise business worldwide. A franchisor’s disclosure document may be de-registered or a fine may be imposed if this Yearly Franchise Report is not accepted by the Korean Fair Trade Commission within 120 days of the closing of the year. The Yearly Franchise Report, in Korea, is intended to notify franchisees and prospective franchisees of changes in the operations of the franchisor. Don’t forget – file the
Continue readingEnglish-speaking Korean lawyers and International Lawyers at International Law Firm in Korea discussing issues of Korean Law
IPG Legal is a leading client-focused international law firm with offices in Korea that is, often, selected over the ubiquitous Korean Law Firms when success is essential and success depends on nuanced street-smart advice, proactive and unconflicted representation. Our attorneys are, intentionally. different from the crowd. From our retired judge partners to our junior associates, we are all trained with an intense focus on client success, lawyer proactivity, and to understand the nexus between your commercial and legal needs. Our attorneys shall never push to you useless memos,
Continue readingFranchising in South Korea: Practical Law’s Franchising Global Guide Korean Chapter by IPG Legal
This Global Guide Q&A on South Korean Franchise Law provides an overview of the main practical issues concerning Korean franchising, including current market activity; regulation of franchising in Korea; contractual issues relating to franchising agreements in Korea (including pre-contract disclosure requirements, formalities, parties’ rights and obligations, fees and payments, term of agreement and renewal, termination, and choice of law and jurisdiction); Korean Operations Manual; liability issues; Korean intellectual property; real estate; competition law; employment issues; dispute resolution; exchange control and withholding; and proposals for reform in Korea.
Continue readingA “Franchise” Defined under Korean Law: Franchise Law Basics
Korea Franchise Law Korea has a very broad definition of a “franchise” under Korea’s Franchise Law. The definition of a franchise, in Korea, is noted in Korea’s Franchise Act and has been fairly consistently applied by the courts and Korea’s Fair Trade Commission. If you are deemed a franchise in Korea, you shall have disclosure and other requirements prior to offering your franchise for sale in Korea. Korea’s Franchise Act defines a franchise as: “a continuous business relationship in which the franchisor allows the franchisee to sell
Continue readingWill McDonald’s Korea Franchise in Korea?
In early April this year, chief executive and president of McDonald’s, Steve Easterbrook, announced that the company was seeking a “strategic partner” in Korea, as part of the company’s implementation of a “global turnaround strategy.” A report on the announcement can be found at: McDonald’s seeks strategic partner in Korea. At the time, the company did not elaborate as to what exactly was meant by “strategic partner” though McDonald’s did say that the company was “open to all possibilities” including a master franchise or joint ventures with
Continue readingEnforcement of Sales Promotions by Franchisors under Korean Franchise Law
Can an international franchisor force a local Korean franchise to cut the prices of a product via a sales event? This issue was addressed by the Korean Supreme Court in 2003Du7484. In this Supreme Court of Korea case, a franchisor, among other things, mandated via the franchise agreement for a franchisee to hold sales events. The franchise agreement did not specify the specific details of the sales events. The franchisor elected to utilize the clause in the franchise agreement to force the franchisee to initiate a sales
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