Foreign Franchisees Joining the Korean Franchise Association

The Korean Franchise Association is an organization that is authorized/licensed by the Korean Ministry of Trade, Industry & Energy. All domestic and foreign franchises that have registered Franchise Disclosure Statements with the Korean Fair Trade Commission can apply to the Korean Franchise Association. IPG Legal believes, most foreign franchisors, should join the Korean Franchise Association. The KFA is an excellent resource for market intelligence and an excellent conduit to understand the unique aspects of the Korean franchise market and Korea’s

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Definition of “Ordinary Wage” in Korea: Korean Employment & Labor Law Basics

The courts of the Republic of Korea, for years, has struggled to find a consistent interpretation of an “Ordinary Wage.” The definition of Ordinary Wage, under Korean Law, was clarified by the Korean Supreme Court in two decisions handed down on December 18, 2013. The calculation of Ordinary Wages is important, since the calculation is utilized to calculate statutory entitlements, and thus has an impact on the aggregate amount of contributions necessary to be paid to employees. For example, according

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Dismissal of Employees in Korea: Supreme Court of Korea Precedent

The Korean Supreme Court ruled, in March of 2018, that a company may terminate employees for one incident of employee gambling. The case is a precedent that may make it easier for employees to terminate employees that violate certain company rules without the need to provide notification and an opportunity to improve. The case stems from the termination of bus drivers that were caught on one occasion gambling prior to driving buses. The lower courts ruled, in short, that gambling

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Require a Injunction in a Korean Court Against your Former Korean Franchisee for Competing Against your New Korean Franchisee?

Under the Fair Franchise Transactions Act of Korea (“Franchise Act”), a franchisee has the right, under Korean Law, to request the renewal of a Korean franchise agreement after ten years of successful operation of a franchise.  In some cases this reality leads to a Former Franchisee continuing the franchise in competition with your new franchisee. We wrote about termination of a Korean franchise in other articles including: Termination of a Franchise in Korea.  Also, you can view other articles on

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Wrongful Termination in South Korea

South Korea is not an “at-will” employment country, which means that an employer may not dismiss an employee for any reason nor without warning or notice. Under the Korean Labor Standard Act, an employer who has five or more employees may not dismiss or suspend from work any of its employee without “justifiable cause.” And even the employer can establish justifiable cause for dismissal, in Korea, the employer is still required to give a minimum of 30-days advance notice (or

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Drafting of Korean Distribution Agreements for your Distributor in Korea.

Drafting of a Korea-centric distribution agreement and a good deal of due diligence of the anticipated distributor/agent is necessary for avoiding issues that may require the litigation services of a law firm.  Some of the articles posted by IPG Legal on Due Diligence may be found at: Doing Business in Asia: Due Diligence, Agreements, Attorneys and Street Smarts Listen to My Mother: JVs in Korea (Translated from Korean) Debt Collection Cases in Korea on the Rise: Due Diligence Brother I have

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Drinking Culture in Korea Explained by Tom Coyner

It’s funny how words can inform and mislead. When I first came to Korea in the mid-1970s, I often was enchanted and confused by the similarity of Korean and Japanese. For example, I stumbled across the word “judo.” Was it the martial art? No, that was “yudo” in Korean. It turns out that in at least literary circles, judo refers to the “way of wine.”  For an article on Importing and Selling Wine in Korea, please see: Importing & Selling

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Execution of Stock Options in Korean Corporations under Korean Commercial Code

Stock options, in Korea, are often provided to senior foreign and domestic employees of companies in Korea.  For stock options, in non-listed/non-public companies in Korea, to be exercisable by employees in Korea (thus a valid option) the option must be approved, in most cases, at a general shareholders meeting of the Korean company. Another article that may be of interest can be found at: Granting & Exercising Stock Options in Korea.   The articles of incorporation should be amended or should

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Contracts Necessary for Doing Business with a Korean Company?

If you would like to avoid Korean court expenses and headaches related to your business in Korea, please do yourself a favor and have you Korean contracts drafted by an experienced Korean professional prior to doing business with a Korean company.  Many of the standard agreements utilized in the West are not adequate for Korea. We handle litigation and arbitration matters for many clients that either used a Korean attorney without adequate experience or that have foregone the use of

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How to Successfully Manufacture OEM in Korea: First Break Products Down to the Threads

While China is the factory to the world, Korea is, still, a great choice for those that enjoy less headaches.  Even though Korea tends to be easier to painlessly manufacture OEM in, Korea is not without risk or pains.  Thus, we advised over the years on these pages to, always, do your due diligence in Korea.   We see an alarming number of cases of fraud and, also, an alarming number of cases where a product infringes on a patent or

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Protecting your Intellectual Property Rights in Korea: Avoid “Trying Different Things & Smoking Funny Things”

A popular song regularly played on the radio proclaims that in the summer of 1989 the songwriter, Kid Rock, was “trying different things and smoking funny things.”  If you have any exposure to the Korean market, do your business a favor and don’t be like the songwriter.  All business with any exposure to the Korean market must have a plan in place to protect their intellectual property.  Thus, for the sake of your company, at a bare minimum, you should

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Korean Labor Law Checklist for Employers and Employees

The Korean Ministry of Labor created this list with revisions by Sean Hayes and IPG.  I will update the list periodically. The checklist is intended for all employers that employ five or more workers. The list contains many generalizations, thus, don’t take this as the end all list.  I suggest, also, clicking on the label to the right entitled Korean Employment Law.  Please note that Korea’s Labor Law is evolving rapidly, thus, this list may not reflect recent changes.   KOREAN

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Debtor’s Liability to New Owner after Transfer of Business and Trade Name

A developer recently contacted IPG Legal concerning a dispute with a supplier of building materials.  The developer purchased building materials from a supplier with payment to be forwarded 30-days after receipt of the materials. This is a common practice when a supplier has a long-term relationship with a developer, provides a consistent flow of supplies to a developer, and the developer is solvent. Here comes the problem.  The supplier was sold and the business and trade name was transferred to

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Korean Prosecutors & Police Powers under Amended Criminal Procedure Law

One of the most substantial changes in the powers between the Prosecutors’ Office and Police Office was enacted by the Korean National Assembly through amendments to the Korean Criminal Procedure Act and Prosecutors’ Office Act. These Amendments were made to the Criminal Procedure Act of Korea and the Prosecutors’ Office Act of Korea that shall take effect in 2021. The Amendment reduce the power of the Korean Prosecutions to initiate investigations in certain types of cases, while expanding the powers

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Korea emerges as an Arbitration Hub in East Asia

With several major international companies now calling Seoul home and many international construction contracts choosing Seoul as the venue for arbitration, international arbitration matters are on the rise in Korea. American, Australian, British, Chinese, Indian, German have expanded their interest in the growing Korean market. International conglomerates in Korea have long understood the value of the arbitration process. Regrettably, few Korean attorneys are capable of handling international arbitration cases in the English language, because of the lack of experience in

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International Arbitrations in Korea under the IBA Rules

Procedural Arbitration rules are key to the efficient and effective adjudication of arbitration disputes in Korea and, also, worldwide.  These arbitration rules govern and set out the framework for the arbitration process. Evidence gathering and presentation are important aspects of the above procedure, and yet, institutional and ad hoc rules that provide arbitration guidelines on other matters such as the appointment of arbitrators and the nature of award and costs are, usually, silent on this point. Advantages of such a

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Koreans Hold Unique View on Foreign Firms by Tom Coyner

For many years, the Korean market has been synonymous with protectionism in many foreign marketers’ minds. However, with the advent of a strong middle class and its successful struggle to gain a genuine democracy during the past two decades, many of the trade barriers have fallen. As more foreign products and services have become integrated into the Korean economy, a wider acceptance of foreign corporations has taken place. However, it would be a mistake to say this is a trend.

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Last week’s Recap of the Top Legal Headlines in South Korea for the week of August 2, 2021:

Korean Telecos winning the war against Netflix in the streaming battle New Fake news law set to damage press freedom FTC investigates Korean Bar Association over law talk ban Supreme Court upholads fine for Nissan Korea Korean government to compensate nurse paralysed by COVID shot You may schedule a free initial consultation with a lawyer at: Please Schedule a Call with an Attorney. Latest Posts: The Signs of a Great Criminal Lawyer in Korea | English-Speaking Criminal Defense Attorney in

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Last week’s Recap of the Top Legal Headlines in South Korea for the week of July 26, 2021:

South Korea tables law to remove app stores’ in-app purchase monopolies Korean parliament set to allow direct seizure of crypto assets Anti-Google law gaining strong support from US business groups in Korea Korean crypto exchanges set to come under extra pressure from authorities Employers set to be punished with imprisonment over workplace disasters You may schedule a free initial consultation with a lawyer at: Please Schedule a Call with an Attorney. Latest Posts: The Signs of a Great Criminal Lawyer

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Content Opportunities for Int’l Entertainment Companies in Korea

The global success of BTS hasn’t gone unnoticed in the US, as Korea remains an excellent market for foreign companies actively pursuing content partnerships in Asia. Over the last decade, IPG Legal has built significant relationships with major entertainment companies in Korea and abroad and worked on several international collaborations. British singer Ed Sheeran is the latest foreign entertainer to collaborate with a K-Pop band. Sheeran co-wrote the lyrics for the BTS single “Permission to Dance.” International content and entertainment

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