Biggest chain of bakeries accepts new restrictions

Paris Baguette, the country’s major bakery franchise, accepted the recommendation of the National Commission for Corporate Partnership (NCCP), which ordered the chain to refrain from opening new stores after categorizing bakeries as a business reserved for small and medium enterprises.

After resisting the decision, Paris Baguette announced its acceptance Wednesday.

“In the future, we will comply with the recommendations from the NCCP as much as we can in the domestic market and roll out overseas units more actively to grow into a global bakery company,” said a spokesman for the company.

The decision came shortly after Cho Sang-ho, a representative of SPC Group, the parent company of Paris Croissant and Paris Baguette, met with Yoo Jang-hee, chairman of the NCCP on Wednesday morning.

“We will do our utmost to protect the interests of the franchisees and work for the development of the domestic baking industry,” said a spokesman at Paris Croissant.

“In a broad sense of achieving mutual benefits and shared growth, we decided to embrace the recommendation positively,” said a company official.

Earlier this month the NCCP designated 14 service industries, including bakeries and restaurants, and two manufacturing businesses as areas reserved for small enterprises.

The recommendation effectively stops large- and medium-sized companies from expanding their businesses in those areas.

Bakery franchises will not be allowed to open stores within 500 meters (1,640 feet) of existing mom-and-pop bakeries. On top of that, their growth will be limited to 2 percent of the total number of stores they operated last year.

Paris Croissant protested that the 500 meter limit was in effect a ban on new outlets.

The Emergency Response Committee for Basic Rights of Self-employed Franchisees formed by Paris Baguette franchisees filed a lawsuit and asked that Korea Bakery Association President Kim Seo-joong be suspended.

The KBA reported the chain to the Fair Trade Commission saying it was mobilizing its franchisees to protest KBA activities in violation of the Fair Trade Act.

Meanwhile, the head of committee said the lawsuit against the KBA is separate from Paris Baguette Headquarters and will not be dropped.

By Choi Ji-young [kjy@joongang.co.kr]