[Sunwoon Law Firm]
An expert briefing session on the issue of “differential franchise fees,” arising from the transaction structure between franchisors and franchisees, was held on September 22, 2025, at the AT Center in Seocho-gu, Seoul. The session was organized ahead of the Supreme Court’s ruling in the Pizza Hut differential franchise fee litigation, which is expected to have a significant impact on the entire franchise industry, with the aim of sharing perspectives from industry stakeholders and experts and exploring possible responses.
The litigation concerns whether the practice of franchisors designating certain goods for supply and collecting a margin (differential fee) constitutes a violation of the Fair Trade Act. The outcome of the case is expected to affect the general operating structure of franchises.
Attorney Taewoon Yoon of Sunwoon Law Firm, who is representing the Korea Franchise Association in its application to intervene on behalf of Pizza Hut, expressed concern during the briefing that a fragmented legal interpretation lacking an understanding of the overall franchise structure could destabilize the very foundation of the franchise industry. He emphasized, “The franchise business model has developed on the basis of trust between franchisors and franchisees and the choices of consumers,” highlighting the need for a careful legal judgment that reflects these unique characteristics and the broader industrial context.
Attorney Yoon further stated that rather than simply questioning the form of differential franchise fees, it is necessary to take a balanced approach that considers the substance of individual transactions, the profit structure of franchisees, and the respective roles and responsibilities of franchisors.
Sunwoon Law Firm will continue to leverage its expertise in fair trade and franchise law to contribute to building a sound franchise ecosystem and ensuring legal stability.
▼ Related news articles on this matter can be found at the link below.
https://n.news.naver.com/article/117/0003990735?sid=103
https://www.news1.kr/industry/distribution/5920462
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