SEOUL, KOREA - The average sales revenue per convenience store is on the decline. According to the Korean National Statistical Office on May 27, convenience store sales rose to 10,234.8 billion won last year from 5,514.9 billion won in 2008, up 85.6 percent in four years. For the same period, however, the total number of convenience stores has increased 104.8 percent to 24,170 from 11,802 in 2008.
As the speed of new store opening surpasses that for overall sales revenue increase, the per-store sales revenue fell 9.4 percent to 423,450,000 won from 467,290,000 won from four years ago.
With the per-store sales revenue in decline, disputes between franchisers and franchisees are on the rise. According to figures by the Korea Fair Trade Mediation Agency, a dispute mediation organization under the Fair Trade Commission, 45 cases (20.2%) out of 223 disputes related to convenience store franchise contracts between 2008 and 2012 were about false representation.
Those franchisees who want to quit after realizing the actual sales volume falls far short of the level the franchiser said it would be have frequent disputes with the franchiser over early termination fee.
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