France association apologizes over unfair biz practice

An association of local franchise companies offered an apology on Wednesday, vowing to reform themselves to end unfair business practices across the board.

 "Unfair business practices and inappropriate actions have caused social problems and hurt small business owners," said Park Ki-young, the chairman of the Korea Franchise Association. "I sincerely apologize as the head of the franchise industry."

The apology made at a press conference comes a day after the country's antitrust regulator, the Fair Trade Commission, announced a set of measures meant to strengthen the rights of franchisees. The measures include pushing food franchisers to release information on the profit margins of essential goods that franchisees need to buy from their corporate parents.

The FTC also stressed it would ensure franchisees can report any abusive corporate practices to the commission while banning franchise headquarters from taking any retaliatory steps, including the unilateral termination of contracts.

"The association agrees with the FTC on many points," said Park, adding that it will actively cooperate with the government.

The latest move came amid a public uproar against Chung Woo-hyun, the founder of Mr. Pizza, a major South Korean pizza franchise.

Earlier this month, the Seoul Central District Court issued an arrest warrant for Chung over suspicions that he ripped off contractors and embezzled company funds.

He is accused of forcing franchisees of the Mr. Pizza brand to buy cheese above market prices from a food distributor run by a relative. Chung is also suspected of having the company pay his family members' salaries even though they did not show up for work.

Mr. Pizza is a local brand launched by Chung in 1990. It has grown to be one of the top three pizza chains in the country, currently running over 300 stores nationwide and some 140 branches in China. (Yonhap)