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Yoon Hong-geun, Chairman of Genesis BBQ Group (Photo: Genesis BBQ) |
[Alpha Biz= Paul Lee] Some BBQ Chicken franchisees have filed a lawsuit against its headquarters, Genesis BBQ Group, demanding the return of excess franchise fees.
According to industry sources on Thursday, 68 BBQ Chicken franchisees filed a lawsuit at the Seoul Eastern District Court against Genesis BBQ Group, claiming the return of unjust profits. The total amount of the lawsuit is 6.8 million KRW, with each franchisee seeking 100,000 KRW.
BBQ Chicken has about 2,300 franchisees, and the 68 franchisees who filed the lawsuit represent approximately 3% of the total.
The "excess franchise fee" refers to the profit made by the franchisor when it supplies raw materials at prices higher than the market wholesale prices, essentially a type of "distribution margin." The franchisees argue that the excess fees taken by the headquarters are too high.
This lawsuit comes after a similar case in September of last year, when franchisees of Pizza Hut Korea filed a lawsuit regarding the same issue, and the court ruled in favor of the franchisees. This case has sparked similar lawsuits in the franchise industry, with BBQ Chicken, Lotte Super, Lotte Fresh, and bhc Chicken also being involved in similar legal battles.
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
