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Photo courtesy of Yonhap News |
[Alpha Biz= Kim Jisun] South Korea’s Fair Trade Commission (FTC) has imposed corrective orders and an administrative fine of KRW 318 million on SPC BR Korea, an affiliate of SPC Group and the local operator of Dunkin and Baskin Robbins, for conducting promotional campaigns without obtaining prior consent from franchisees.
The FTC announced on February 1 that SPC BR Korea violated the Franchise Transactions Fairness Act by proceeding with promotional events without securing advance approval from at least 70% of franchise store owners, as required under the law.
According to the regulator, SPC BR Korea partnered with credit card companies and mobile telecommunications firms in 2023 and 2024 to run promotional campaigns for Dunkin. Investigators found that the company failed to obtain prior consent from more than 70% of all franchisees before launching the campaigns, despite franchisees bearing part of the promotional costs.
Under the Franchise Transactions Fairness Act, a franchisor is required to obtain consent from at least 70% of franchisees when conducting promotional activities in which franchisees shoulder all or part of the associated expenses.
The FTC further revealed that during a Baskin Robbins promotional campaign in 2024, SPC BR Korea manipulated consent records by falsely counting a non-consenting franchisee as having approved the promotion, thereby creating the appearance that the statutory approval threshold had been met.
This enforcement action marks the first case in which the FTC has imposed a monetary penalty since the prior-consent requirement for franchise promotional campaigns was introduced in July 2022.
Alphabiz Reporter Kim Jisun(stockmk2020@alphabiz.co.kr)
