Paris Baguette HQ raided in probe

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Paris Baguette HQ raided in probe

The Fair Trade Commission on Monday raided SPC Group, the largest bakery franchise in Korea and known for its Paris Baguette outlets, to see if it was muscling franchisees.

It raided its headquarters in Seongnam, Gyeonggi and its Seoul operation in Yeoksam, southern Seoul.

The antitrust watchdog is probing whether the group has pressured franchisees to expand their store areas when renewing contracts with the company or to use construction companies affiliated with the group for decorating their stores.

The action is part of a government drive to protect small and local bakeries.

Large conglomerates including Hotel Shilla, LG Group and Hyundai Motor Group yielded to government pressure and pulled out of their bakery and cafe businesses in January after being criticized for being a threat to mom-and-pop shops.

“Because the investigation is still ongoing and there can be so many variables, it’s too soon to say what we can conclude out of the records we found,” said the commission’s public relations team.

The bakery group says it was startled to become a target of the commission’s investigation because it has been consulting with the commission to establish standard regulations for opening new franchises.

“We are a bit confused with the ongoing investigation, but we’ll cooperate,” said the company.

Prior to the investigation, the commission proposed some regulations in March regarding the required distance between franchise branches and support from the headquarters for franchisees doing store renovations.

SPC suggested it would provide full support to stores that have been operating for more than 10 years for interior renewals, and some incentives to stores operating for five years or more.

By Lee Sun-min [summerlee@joongang.co.kr]

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