FTC to impose sanctions on Subway for its unilateral closure of a franchise shop
FTC to impose sanctions on Subway for its unilateral closure of a franchise shop
  • Kim Min-jee
  • 승인 2019.10.30 14:41
  • 댓글 0
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The sandwich franchise, Subway, was found to have unilaterally closed a franchise store and said, "If you have any objection, call the U.S. arbitration body in English."

The Fair Trade Commission (FTC) plans to impose sanctions on Subway, believing that it violated the merchant business law.
According to related industry sources on Oct. 28, the FTC's Seoul office recently concluded that the Subway's act of forcing a 55-year-old branch store owner, Mr. A, to close a branch in Anyang, Gyeonggi Province, violated the franchise law.

The investigation followed the report of Mr. A. In October 2017, the company notified A that it would unilaterally close his branch. The reason is the accumulation of penalty points. The reason was that he used detergent and electric fans that were not designated by the head office and did not have enough cleaning in the store.

In response, A asserted, "We corrected the matters immediately. It is a move that the headquarters of Subway is trying to take away the franchises that are doing well and turn them into direct operation."

"The closing of the contract will follow the decision of the U.S. Center for Arbitration and Resolution," Subway said in a statement. The U.S. arbitration procedure is also unfamiliar to Korean lawyers. The man personally made the n response, A said, "We corrected the comments immediately. It is a move that the headquarters of Subway is trying to take away the franchises that are doing well and turn them into direct business."

"The closing of the contract will follow the decision of the U.S. Center for Arbitration and Resolution," Subway said in a statement. The U.S. arbitration procedure is also unfamiliar to Korean lawyers. The man personally made explanatory materials in English and sent them to the center, but the center sided with the Subway in August.

The FTC said that even if the U.S. arbitration settlement center went through procedures, unilaterally closing the store violated the merchant business law. The FTC will soon hold a meeting to screen the review report presented by the Seoul office before finalizing sanctions on Subway.


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