The Korean Fair Trade Commission’s decision to sanction BR Korea Co., Ltd., the franchisor of Dunkin’/Dunkin’ Donuts and Baskin-Robbins, represents a big step in the enforcement of the Fair Transactions in Franchise Business Act. By imposing a corrective order alongside an administrative fine of 318 million KRW, which converts to approximately €219,300, the regulator has sent a clear message regarding the mandatory nature of the prior-consent system. This system was established specifically to protect the financial autonomy of franchisees from being undermined by the unilateral marketing decisions of a powerful franchisor.
The core of the legal violation centered on BR Korea’s failure to meet the statutory 70% consent threshold before launching cost-sharing promotional events. In the case of the Dunkin’ brand throughout 2023 and 2024, the company moved forward with partnership promotions involving Hyundai Card and SK Telecom without securing the required level of agreement from its store owners. The situation at Baskin-Robbins was even more ethically fraught, as the KFTC found that the headquarters had arbitrarily manipulated consent data to falsely suggest that the 70% threshold had been reached for promotions with major telecommunications providers.
This enforcement action is particularly noteworthy because it is the first time a monetary fine has been issued for a violation of the prior-consent rule since its introduction in July 2022. The KFTC’s stance indicates that the era of “voluntary” compliance for franchisors is over and that strict adherence to procedural transparency is now a prerequisite for any shared-cost business activity. This ruling serves as a vital case study for any organization involved in collective licensing or franchise management, as it proves that regulatory bodies are now willing to look past the “reported” consent to investigate the actual validity of the agreement process.
For professionals in procurement and strategic management, the BR Korea case highlights the rising global trend of protecting smaller entities within a larger ecosystem from unfair cost burdens. It demonstrates that transparency in negotiation is no longer just a best practice but a legal necessity that can carry heavy financial and reputational risks if ignored. As the KFTC continues to broaden its oversight, this precedent will likely influence how large-scale partnership contracts are structured across various industries in South Korea and beyond.