Papa John’s Korea has been fined 1.48 billion won ($1.07 million) by South Korea’s antitrust regulator for engaging in unfair business practices against its franchisees, the Fair Trade Commission (FTC) announced on Thursday.
The pizza chain reportedly forced its franchise shops to purchase 15 specific cleaning products, including hand soaps, directly from the headquarters. This requirement, in effect from July 2015 until recently, was deemed a violation of fair business practices, according to the FTC.
Franchisees who failed to comply with the mandate risked suspension under the company’s operational guidelines, which the FTC identified as a breach of the country’s franchise business act.
Additionally, between 2015 and 2022, Papa John’s Korea required 25 franchise locations to undergo renovations but did not cover the associated costs, leaving franchisees financially burdened.
Along with the fine, the FTC ordered the pizza chain to reimburse the affected franchisees and implement corrective actions.
“These actions violated the rights of franchise owners by restricting their economic freedom and decision-making,” the FTC stated. “We will continue to closely monitor and address unfair practices by franchise headquarters.”
Related Topics
- Eat Pizza Brings Halloween Thrills with Spooky Set Meal
- Toppers Pizza Expands in Nebraska with New Franchisees
- New Orleans pizzeria offers ‘free pizza for a year for Swift tickets’
