Article 1(Purpose) #
The purpose of this Act is to contribute to the sound growth of the national economy by prescribing matters necessary for the promotion of franchise business, thus establishing the foundation for the development of franchise business, and strengthening the competitiveness of franchise business.
Article 2(Definitions) #
The terms used in this Act are defined as follows:
1. The term "franchise business" means a continuous business relationship, under which a franchise headquarters allows its franchisees to use its own trade mark, service mark, trade name, emblem, or any other business mark (hereinafter referred to as "business mark") and sell a commodity (including raw materials and supplementary materials) or a service in conformity with certain quality standards or a certain business method, provides them with support for and education on business management and business activities, and controls their business operations, and franchisees pay money to the franchise headquarters in return;
2. The term "franchise headquarters" means a business entity who grants franchisees a license to run a franchise business;
3. The term "franchisee" means a business entity who holds a license granted by franchise headquarters to run a franchise business under his or her responsibility and on his or her own account;
4. The term "franchisor" means franchise headquarters and their franchisees.
Article 3(Relationship to other statutes) #
Except as otherwise provided for in any other Act, the provisions of this Act shall apply to supporting and fostering franchise business.
Article 4(Basic plans) #
(1) In order to promote franchise business, the Minister of Trade, Industry and Energy shall establish a basic plan for the promotion of franchise business (hereinafter referred to as "basic plan") every five years after consulting with the heads of the central administrative agencies concerned. <Amended on Feb. 29, 2008; Mar. 23, 2013; Oct. 1, 2025>
(2) A basic plan shall contain the following matters: <Amended on Jan. 21, 2014>
1. The basic direction of the promotion of franchise business;
2. Matters concerning the system for the promotion of franchise business;
3. Matters concerning the strategy for the development of franchise business by sector;
4. Matters concerning the establishment of a foundation for the development of franchise business;
5. A scheme for the structural improvement of franchise business and enhancement of competitiveness;
6. A scheme for collaborative cooperation between franchise headquarters and franchisors;
7. Other matters necessary for the promotion of franchise business.
Article 5(Implementation plans) #
(1) In order to implement a basic plan, the Minister of Trade, Industry and Energy shall establish an implementation plan for the promotion of franchise business (hereinafter referred to as "implementation plan") each year after consulting with the heads of the central administrative agencies concerned. <Amended on Feb. 29, 2008; Mar. 23, 2013; Oct. 1, 2025>
(2) The Minister of Trade, Industry and Energy and the heads of the central administrative agencies concerned shall conduct activities under their jurisdiction among the activities included in an implementation plan and shall endeavor to secure financial resources required for such activities. <Amended on Feb. 29, 2008; Mar. 23, 2013; Oct. 1, 2025>
(3) The heads of the central administrative agencies concerned may, if necessary for the promotion of franchise business, request the Special Metropolitan City Mayor, a Metropolitan City Mayor, a Do Governor, or a Special Self-Governing Province Governor to take measures required to conduct an implementation plan.
Article 6(Cooperation of heads of competent central administrative agencies) #
The Minister of Trade, Industry and Energy may, if necessary for establishing and conducting a basic plan and an implementation plan, request the cooperation of the head of any central administrative agency or local government concerned. In such case, the head of the central administrative agency or local government concerned who is requested to provide cooperation shall comply with such request, except in extenuating circumstances. <Amended on Feb. 29, 2008; Mar. 23, 2013; Oct. 1, 2025>
Article 7(Investigation into actual status) #
(1) In order to establish and promote a basic plan and an implementation plan thereunder in an efficient way, the Minister of Trade, Industry and Energy shall investigate the actual status of franchise business every two years. <Amended on Feb. 29, 2008; Mar. 23, 2013; Jun. 15, 2021; Oct. 1, 2025>
(2) The Minister of Trade, Industry and Energy may request the head of any relevant central administrative agency or local government or the head of any public agency under the Act on the Management of Public Agencies (hereinafter referred to as "public agency") to furnish him or her with relevant materials. In such case, the head of the central administrative agency, local government, or public agency concerned who is requested to provide materials shall comply with such request, except in extenuating circumstances. <Amended on Feb. 29, 2008; Mar. 23, 2013; Oct. 1, 2025>
(3) Necessary matters, such as the scope and method of investigations into actual status under paragraph (1), shall be prescribed by Presidential Decree.
Article 8 #
Deleted. <Mar. 18, 2009>
Article 9(Development of efficient logistics system and facilitation of informatization for franchise business) #
The Government may push the following projects forward to develop an efficient logistics system for franchise business and facilitate informatization thereof:
1. The expansion of joint logistics facilities for the storage, delivery, and packing of raw materials, supplementary materials, and commodities;
2. The establishment of a database and an information system concerning the current status and logistics facilities for franchise business;
3. The development and extension of a point-of-sale system;
4. The development and extension of an information management system for efficient store management;
5. Other projects deemed necessary for developing an efficient logistics system and facilitating informatization for franchise business.
Article 10(Improvement of expertise of franchisors) #
The Government may push the following projects forward to improve the expertise of franchisors:
1. The education and training of persons engaged in franchise business to improve their qualities;
2. Cultivating professional human resources for franchise business;
3. Other projects deemed necessary for improving the expertise of franchisors.
Article 11(Projects for development of technology) #
(1) The Government may push forward the following projects for the development of technology related to franchise business:
1. The development of technology for the manufacturing and management of commodities related to franchise business;
2. The development of designs of business marks.
(2) The Government may take measures necessary for supplying information for the development of technology for franchise business.
Article 12(Protection of intellectual property rights) #
(1) The Government shall formulate a policy on the protection of intellectual property rights of franchise business such as patent rights, utility model rights, design rights, trademark rights, and copyrights. <Amended on Dec. 11, 2018>
(2) The Government may push the following projects forward to protect intellectual property rights of franchise business: <Amended on Jan. 27, 2016; Dec. 11, 2018>
1. Technical protection for commodities and business marks of franchise business;
2. The encouragement of labeling information about management of rights, such as information for discerning right-holders of franchise business;
3. The establishment of a database and an information system for the protection of intellectual property rights of franchise business;
4. Education, public relations, and consulting activities for intellectual property rights of franchise business;
5. Other projects deemed necessary for the protection of intellectual property rights of franchise business.
[Title Amended on Dec. 11, 2018]
Article 13(Assistance in business startups) #
(1) The Government may provide any person who intends to start up a franchise business (hereinafter referred to as "franchise starter") with assistance as may be necessary to encourage him or her to start his or her own franchise business.
(2) The Government shall formulate a policy necessary for providing franchise starters with information about funds, human resources, technology, markets, business locations, etc. necessary for the business startup and the growth and development of franchise business.
(3) The Government may request the head of any central administrative agency, local government, or public agency to furnish it with materials necessary for supplying the information under paragraph (2).
Article 14(Supply of information necessary for business conversion) #
(1) The Government may promote measures necessary for providing small and medium business entities (referring to small and medium business entities defined in Article 2 of the Framework Act on Small and Medium Enterprises; the same shall apply hereinafter) who push to convert their business into a franchise business and franchisors who push to convert their business into another franchise business with information necessary for such business conversion, such as technology, markets, and types of business into which they intend to enter.
(2) The Government may provide small and medium business entities and franchisors prescribed in paragraph (1) with assistance in improving business management, technology, finance, accounting, etc.
Article 15(Activities for promotion of franchise business) #
The Minister of Trade, Industry and Energy may push the following projects forward in order to raise citizens' awareness of franchise business and facilitate entrepreneurship: <Amended on Feb. 29, 2008; Mar. 23, 2013; Oct. 1, 2025>
1. Identifying and offering reward for cases of successful creative startups and outstanding commodities and services;
2. Hosting business startup exhibitions and trade fairs showcasing outstanding commodities and services;
3. Hosting other events relating to business startups and promotion of franchise business.
Article 16(Facilitation of internationalization of franchise business) #
The Government may push the following projects forward in order to facilitate the internationalization of franchise business:
1. International exchanges of information, technology, and human resources for franchise business;
2. Holding international academic conventions, international exhibitions, or the like for franchise business;
3. Conducting research on and analysis of overseas franchise business markets and supplying collected information in a systematic way;
4. Providing consulting services to franchise headquarters for entering into overseas markets;
5. Other projects deemed necessary for internationalization of franchise business.
Article 16-2(Establishment of information system) #
(1) To provide strategic support for franchise business to expand into overseas markets, the Minister of Trade, Industry and Energy may establish and operate an information system to manage the following information and data: <Amended on Oct. 1, 2025>
1. Information and data on policies for supporting franchise business to expand into overseas markets;
2. Local information and data for the overseas expansion of franchise business;
3. Information and data on international cooperation and technology exchange with foreign countries relating to the overseas expansion of franchise business;
4. Information and data on the nurturing and management of human resources related to the overseas expansion of franchise business;
5. Other information and data prescribed by Presidential Decree for promoting the overseas expansion of franchise business.
(2) The the Minister of Trade, Industry and Energy may request data necessary to establish and operate the information system referred to in paragraph (1) from the heads of central administrative agencies, local governments, public agencies and related associations and organizations, etc. (hereinafter referred to as "central administrative agencies, etc."). In such cases, the heads of the central administrative agencies, etc. shall comply with such requests for data, except in extenuating circumstances. <Amended on Oct. 1, 2025>
(3) The central administrative agencies, etc. may utilize the information system referred to in paragraph (1) to provide support for franchise business to expand into overseas markets.
(4) Matters necessary for the establishment and operation of the information system pursuant to paragraphs (1) through (3) shall be prescribed by Presidential Decree.
[This Article Added on Jun. 15, 2021]
Article 17(Financial support) #
The Government may provide financial support for the following activities:
1. The startup of new franchise business or the commercialization of ideas by any franchise business starter;
2. The development of business environment that small and medium business entities need for converting their business into franchise business and the improvement of facilities for such purpose;
3. The informatization and development of technology for franchise headquarters that registered their written statement of information disclosure with the Fair Trade Commission in accordance with Article 6-2 of the Fair Transactions in Franchise Business Act (hereafter referred to as "franchise headquarters with their written statement of information disclosure registered" in this Article) and their franchisees;
4. The development of overseas markets for franchise headquarters with their written statement of information disclosure registered;
5. Other activities specified by Presidential Decree as deemed necessary for facilitating the structural improvement of franchise business.
Article 18(Entrustment of business affairs) #
(1) The business affairs under the control of the Minister of Trade, Industry and Energy among the following business affairs under this Act may be entrusted to a legal entity or an organization specified by Presidential Decree, as prescribed by Presidential Decree: <Amended on Feb. 29, 2008; Mar. 23, 2013; Jan. 27, 2016; Dec. 11, 2018; Jun. 15, 2021; Oct. 1, 2025>
1. Business affairs relating to the development of an efficient logistics system for franchise business and the acceleration of informatization therefor under Article 9;
2. Business affairs relating to education and training and the fostering of professional human resources under Article 10;
3. Business affairs relating to protection of intellectual property rights under Article 12;
4. Business affairs relating to activities to promote franchise business under Article 15;
5. Business affairs relating to the acceleration of internationalization of franchise business under Article 16.
6. Establishment and operation of the information system under Article 16-2.
(2) The Minister of Trade, Industry and Energy may provide a legal entity or an organization to whom business affairs have been entrusted pursuant to paragraph (1) with support necessary to enable the legal entity or organization to conduct the business affairs efficiently. <Amended on Feb. 29, 2008; Mar. 23, 2013; Oct. 1, 2025>