South Korea regulator moves to ease franchisee exits, rein in automatic renewals
( October 27, 2025, 09:11 GMT | Official Statement) -- MLex Summary: The South Korean competition regulator is soliciting a study to build a framework that lets struggling franchisees terminate or close with minimal burden by clarifying a statutory termination right and curbing unintended automatic renewals. Citing persistent power imbalances and information asymmetries, the Korea Fair Trade Commission notes that a 2024 survey found 54.9 percent of franchisees experienced unfair practices, while disputes and closure-penalty cases have been rising even as new openings increase. Researchers are tasked with mapping real-world hurdles to termination and closure, reviewing dispute-mediation cases and case law, and explaining why the commercial-law termination right remains unclear and under-used. The regulator seeks draft amendments to the Fair Transactions in Franchise Business Act and its decree to define qualifying circumstances and reasonable notice, clarify the scope of damages, scale liquidated-damage relief and prevent unwanted automatic renewals, in a three-month project slated to begin in December.The related notices, in Korean, are attached....
Prepare for tomorrow’s regulatory change, today
MLex identifies risk to business wherever it emerges, with specialist reporters across the globe providing exclusive news and deep-dive analysis on the proposals, probes, enforcement actions and rulings that matter to your organization and clients, now and in the longer term.
Know what others in the room don’t, with features including:
Daily newsletters for Antitrust, M&A, Trade, Data Privacy & Security, Technology, AI and more
Custom alerts on specific filters including geographies, industries, topics and companies to suit your practice needs
Predictive analysis from expert journalists across North America, the UK and Europe, Latin America and Asia-Pacific
Curated case files bringing together news, analysis and source documents in a single timeline