How can a franchise dispute be resolved?

Hello. This is an attorney specializing in fair trade at Daeryun Law LLC.

Franchise disputes often occur when differences arise between the franchisee and the head office in matters such as contractual terms, operating methods, and the allocation of costs.

In a situation like yours, it is important first to carefully review the terms specified in the contract.

You should examine whether the contract sets out conditions for the supply of raw materials or procedures for price adjustments, and whether the head office has the authority to change these unilaterally.

If the head office has violated the procedures set out in the contract or under the Fair Transactions in Franchise Business Act, it is advisable to formally prepare and send a written request for correction and to preserve evidence.

If the head office still does not make improvements thereafter, you may apply for dispute mediation with the Franchise Business Transaction Dispute Mediation Council.

This council is a fair mediation body that can resolve franchise-related disputes without legal proceedings, and it helps resolve issues promptly and without a cost burden.

In particular, once both parties agree to the mediation proposal, it carries legal effect, so if the head office subsequently fails to perform it, you may also seek compulsory execution through the court.

In other words, dispute mediation can serve not merely as a simple settlement process but as a practical means of resolution.

However, if the agreed matters are not performed, the settlement agreement or mediation record does not become an enforceable title that can be executed by the court, so the applicant must attach it and, in order to obtain an enforceable title, go through
a separate litigation procedure.

In this case, to resolve the franchise dispute, we recommend that you consult directly with an attorney specializing in fair trade.