Antitrust agency fines Pizza Hut Korea for unfair fees

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Antitrust agency fines Pizza Hut Korea for unfair fees

Korea’s antitrust regulator on Tuesday slapped a 526 million won ($437,000) fine on Pizza Hut Korea for its unfair business practice against local outlets.

The U.S.-based restaurant chain has collected a total of 6.8 billion won from franchisees here in the name of marketing and management fees outside of the contract since 2003. The firm had no prior consultations with the shop owners on the “admin fees,” which were raised to 0.8 percent of sales revenue in May 2012 from 0.55 percent.

The Fair Trade Commission said Pizza Hut “unilaterally” jacked up the rate although the local franchise restaurants’ revenues were declining in 2012. The FTC ordered it to address the problem and pay the fine for the violation of a franchise-related law.

“Pizza Hut charged the fees, which have no grounds under a franchise contract, without even the minimum procedure of collecting opinions, exploiting its status as the franchise operator,” a Fair Trade Commission official said. Yonhap

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