Under the current Act, a large franchise store shall not be opened within the sales area of a self-employed small business of the same type, which becomes possible with the recommendation of the National Commission for Corporate Partnership. Yet, there is no compulsory obligation thereof and thus, the distance shall be specifed as 1,000 meters to protect the business district of a small merchant.

Details

This Amendment aims to protect the business districts of small businesses by changing the clause of less than 500 meters with the recommendation of the National Commission for Corporate Partnership to 1,000 meters in the Article 12-4 (Prohibition of Unfair Violation of Sales Areas) of the Fair Transactions in Franchise Business Act (Article 12-4).

A franchiser should set the business area of a franchisee and prescribe it in a franchise agreement when entering into such agreement, but excluding areas within a radius of one kilometer from the existing franchise stores (Article 12-4).