Fair Trade and Franchising
KFTC investigations, subcontracting, franchise and agency disputes, advertising
Fair Trade and Franchising
Fair trade cases in Korea combine an administrative investigation by the Korea Fair Trade Commission with corrective orders, surcharges and sometimes criminal referral. Subcontracting, franchising, agency and advertising each have their own statute, so the rules that apply depend on how your business deals with others.
Daehanjoongang Law Firm responds to KFTC investigations, handles unfair-practice and unfair-support cases, and represents franchisors, franchisees, subcontractors and agents in disputes and in contract reviews.
What we handle
Korea Fair Trade Commission investigations and hearings
Unfair trade practices and abuse of a superior position
Subcontracting Act disputes and payment claims
Franchise Act: disclosure documents, renewals, terminations
Agency Act disputes between suppliers and dealers
Labeling and Advertising Act compliance
Unfair support between affiliated companies
What foreign nationals should know
Foreign franchisors must register a disclosure document in Korean before recruiting franchisees; recruiting without it is a common and costly mistake.
KFTC investigations begin with a written request for materials, and the deadlines are short. We handle the response and prepare you for interviews.
A Korean subcontractor or dealer can bring a complaint to the KFTC directly, and the Commission can order payment of money owed as well as impose surcharges.
Advertising claims that are acceptable in your home market may be treated as misleading in Korea, especially comparisons and health-related statements. We review campaigns before they run.
Frequently asked questions
It usually means an investigation has started. The response deadline is short and what you submit shapes the case, so involve an attorney before answering. Cooperation and voluntary correction can reduce surcharges.
Termination and claims are possible, but the Franchise Act requires specific notices and periods before termination. Skipping them exposes the franchisor to damages, so we follow the procedure precisely.
Unilateral price reductions and similar conduct by a client with a superior position may violate the Subcontracting Act or the Fair Trade Act. Written records of the demands are the key evidence.
Yes, when the conduct affects the Korean market, and the surcharge is calculated on the related Korean sales. Foreign parent companies can also be named in affiliate-support cases.
This page provides general information about Korean law and is not legal advice. Outcomes depend on the facts of each case. Consultations are paid and are held in English or with an interpreter.