[Alpha Biz= Kim Eun-mi] The first court hearing in a lawsuit filed by franchisees of Kyochon Chicken against Kyochon F&B is set to take place next month, as disputes over so-called “margin-based franchise fees” intensify across the industry.
According to the Daegu District Court on April 15, the first hearing is scheduled for the morning of May 28.
At the center of the dispute is the “difference-based franchise fee,” which refers to profits earned by franchisors through distribution markups on ingredients and supplies sold to franchisees. Around 230 Kyochon franchise owners filed the lawsuit in March last year, alleging that the company unfairly profited from such practices.
The claimed damages have recently been increased tenfold—from KRW 1 million to KRW 10 million per plaintiff—bringing the total claim size to approximately KRW 2.3 billion. As the case has grown in scale, it has been reassigned from a single-judge panel to a multi-judge civil division.
Similar lawsuits have gained momentum following a landmark Supreme Court ruling in January ordering Pizza Hut Korea to return KRW 23 billion in excess franchise fees.
Industry-wide, more than 20 franchise brands—including BBQ Chicken, bhc Chicken, Goobne Chicken, Burger King, and Mega Coffee—are reportedly facing similar legal disputes over margin-based fees.
Alphabiz 김은미 인턴기자(kfootle@alphabiz.co.kr)
