Agreement cools dispute over bakery designation

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Agreement cools dispute over bakery designation

Franchise bakery chains and mom-and-pop stores that were embroiled in a legal dispute over the designation of bakery businesses as small- and medium-sized enterprises (SMEs) have finally found common ground.

The Korea Bakery Association (KBA), which represents small bakeries, and the bakery franchise chain SPC and CJ Foodville signed an agreement for shared growth Wednesday at the National Commission for Corporate Partnership (NCCP) headquarters in Guro, southwestern Seoul.

The agreement includes the withdrawal of all lawsuits and recriminations, as well as compliance with the designation recommendation.

“The confectionery industry demonstrated commitment to unify for the sake of achieving shared growth from a broad point of view,” said Yoo Jang-hee, chairman of the NCCP. “We believe the confectionery industry will be able to achieve shared growth through cooperation.”

However, the Emergency Response Committee for Basic Rights of Self-employed Franchisees, which includes 1,800 Paris Baguette franchisees, is still fighting the NCCP decision.

“We will not even consider dropping the two lawsuits filed against the KBA. This agreement is only between the headquarters and the KBA,” said Kang Sung-mo, president of the committee. “Headquarters did not do anything for us, and therefore it is in no position to tell us to withdraw the lawsuits.”

The bakery conflict began after the NCCP designated 14 service industries, including bakeries and restaurants, as areas reserved for small enterprises on Feb. 5.

The commission also ordered bakery franchises, like SPC Group’s Paris Baguette and CJ’s Tous Les Jours, not to open stores within 500 meters (1,640 feet) of mom-and-pop bakeries. On top of that, it recommended that their growth be limited to an annual 2 percent increase in the number of stores they operate.

SPC Group, which has 3,100 Paris Baguettes, had said it would not comply with the commission’s decision.

Last month, franchisees of Paris Baguette joined a lawsuit seeking damages, including the return of association membership fees, and calling for the suspension of KBA President Kim Seo-joong.

The KBA engaged in a counterattack, saying it would report SPC’s subsidiary Paris Croissant to the Fair Trade Commission and file charges of unfair trade practices.

The association also threatened the franchise company with a boycott.

SPC announced its willingness to accept the earlier recommendation of the NCCP on Feb. 20.

By Jang Jung-hoon [kjy@joongang.co.kr]

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