South Korea’s Fair Trade Watchdog Sanctions BRKorea Over Cost-Sharing Promotions

Key Takeaways

• Financial Penalty: BRKorea was fined approximately USD 240,000 (KRW 318 million) and ordered to correct its practices.
• Consent Rules Ignored: Nationwide promotions were launched without securing approval from at least 70 percent of franchisees, as required by law.
• Multiple Brands Impacted: The violations involved promotions across Dunkin and Baskin-Robbins outlets.
• Regulatory Milestone: This is the first fine imposed under South Korea’s franchise promotion prior-consent regime introduced in 2022.

Deep Dive

South Korea’s competition regulator has taken enforcement action against BRKorea Co., finding that the company pushed through nationwide promotional campaigns that required franchisees to share costs without first securing the legally required level of approval.

The Korea Fair Trade Commission announced on February 2 that it has issued a corrective order and imposed an administrative fine of approximately USD 240,000 (KRW 318 million) on BRKorea, the franchisor behind Dunkin/Dunkin’ Donuts and Baskin-Robbins in South Korea.

At the heart of the case is South Korea’s Fair Transactions in Franchise Business Act, which requires franchisors to obtain prior consent from at least 70 percent of franchisees before launching promotional campaigns that shift some or all of the costs onto individual outlets. The rule is designed to ensure franchisees clearly understand what they are being asked to pay for and are able to decide freely whether to participate.

According to the Commission, BRKorea fell short of that standard when it rolled out two nationwide Dunkin promotions: a 2023 Hyundai Card M-Point deduction partnership and a January–February 2024 promotion tied to an ongoing partnership with SK Telecom. In both cases, the campaigns were applied across all Dunkin outlets even though the company had not obtained consent from at least 70 percent of franchisees.

The regulator also identified problems in BRKorea’s handling of 2024 Baskin-Robbins telecom partnership promotions with SK Telecom and KT. The KFTC said the company arbitrarily altered the consent status of certain franchisees, allowing the promotions to proceed as if the consent threshold had been met when, in reality, it had not.

The case carries added weight because it marks the first time the KFTC has imposed an administrative fine since the prior-consent requirement for franchise promotional campaigns was introduced in July 2022. The Commission said the enforcement action is intended to reinforce the rule’s purpose by ensuring transparency around promotional costs and strengthening fair trade practices in franchise relationships.

The KFTC added that it will continue to closely monitor franchisor conduct and take firm action where violations are identified, underscoring its focus on protecting franchisees’ rights and interests.

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