The 'Master Driver's License' franchise headquarters lured potential franchisees by inflating the expected net profit amount and provided false information, leading to sanctions from the Fair Trade Commission.
The Fair Trade Commission announced on the 25th that it imposed a corrective order and a penalty surcharge of 88 million won on JF Partners for violations of the franchise business law.
According to the Fair Trade Commission, JF Partners recruited potential franchisees in December 2021 and April 2022, indicating that 'the expected average monthly net profit for a B-grade commercial district with four machines is 17.8 million won.'
In 2020, the net profit for a franchise in a B-grade commercial district with four machines was around 10 million won, but this was inflated in their guidance.
Additionally, in April 2022, JF Partners provided information to potential franchisees regarding the average annual revenue of existing franchises and issued a business guide stating 'overall store average 35%' without intentionally specifying the reference point (2020).
JF Partners was also found to have received franchise fees without complying with legal deadlines or directly receiving them without depositing them in designated institutions. The Fair Trade Commission determined that JF Partners engaged in unfair trading practices during the franchise recruitment stage and decided to impose a corrective order and penalty surcharge.
The Fair Trade Commission stated that 'to continuously protect the rights of small business owners at franchise stores, we plan to monitor unfair practices by franchise headquarters and take strict action when violations of the law are confirmed.'