CJ Cheiljedang Corp., South Korea's top food maker, and its franchisees signed a pact that helps promote fair business transactions between the two sides, the antitrust regulator said Thursday.
It was the first time that a big company signed such a pact with franchisees since tougher laws on franchise businesses took effect in July this year, the Fair Trade Commission said in a statement.
Under the pact, a franchisee can ask CJ Cheiljedang to renew their contract 10 years after their first contract was signed, the FTC said.
CJ Cheiljedang and their franchisees also set up a voluntary dispute reconciliation panel, and the company will set up a fund of
15 billion won ($12.6 million) for franchisees, the FTC said.
Joh Sung-wook, chief of the FTC, said the pact is expected to help establish "balanced" business conditions between CJ Cheiljedang and their franchisees.
CJ Cheiljedang operates franchise businesses, including bakery franchise Tous Les Jours, coffee chain A Twosome Place and restaurant chain VIPS.
Since July, the FTC has implemented laws regarding subcontracting and franchise businesses in a way that helps better protect subcontractors and franchisees.
The FTC has stressed that creating a level playing field for small and medium-sized companies is very important in a country where conglomerates have dominated the economy for decades. (Yonhap)