Gov’t set to tackle convenience store guidelines

The government is set to enact guidelines on after-hours operation of convenience stores and excessive cancellation fees of contracts imposed on convenience store owners by franchise headquarters.

The move follows a recent incident in which a convenience store owner committed suicide after a conflict with CU over cancellation of the contract. The owner wanted to close the store, but CU demanded that the owner pay for ending the contract prematurely.

CU is the nation’s No. 1 convenience store chain with a market share of 30 percent.

The Fair Trade Commission (FTC), said yesterday it is pushing to amend the relevant act and notice stating the details of shortening the late-hour operations of convenience stores and lowering the termination fees of contracts as a follow-up to the amendment of the Franchising Act, set to be processed next month at the National Assembly.

The FTC will first do research on the compulsory 24-hour operations of convenience stores, which many store owners find to be the most difficult issue they face, to establish a more reasonable number of operating hours. The need for 24-hour operations differs according to locations and commercial districts.

The FTC estimates that there are 2,000 convenience stores nationwide with daily sales less than 110,000 won ($99) between midnight and 6 a.m.

Under the amendment to the Franchising Act currently pending in the National Assembly Legislation and Judiciary Committee, the corporate headquarters cannot enforce 24-hour operations when late-night sales are significantly lower than the cost of running the stores or when there are inevitable causes, such as an illness of the store owner.

The FTC plans to eliminate confusion and conflict in advance by specifying certain details in the act, for instance, the range of late-night operations, the extent of fines that franchise headquarters may levy on store owners and unavoidable reasons for not operating the stores at night. The antitrust agency has also decided to establish guidelines regarding excessive termination fees which convenience store owners claim are particularly unfair.

By Kim Jung-yoon [kjy@joongang.co.kr]