Supreme Court to Deliver Ruling on Pizza Hut 'Price-Markup' Franchise Fee Case on Jan. 15
Creatrip Team
2 months ago
The Supreme Court of Korea will issue its final decision on Jan. 15 in a long-running suit by about 94 Pizza Hut franchisees who claim the company unlawfully charged duplicate franchise fees through “price-markup” margins. Filed in December 2020, the case challenges so-called 차액가맹금 (cha-aek gamanggeum, the difference between a supplier’s cost and the price charged to franchisees) that franchisors add when supplying ingredients and goods. The first-instance court ordered Pizza Hut to return roughly KRW 7.5 billion to some plaintiffs; the Seoul High Court later increased the total to about KRW 21 billion and extended the refund period to include 2016–2018. Key legal questions include whether an agreement was required and existed for collecting such markups, the scope of unjust enrichment, statute of limitations, and burdens of proof. The Supreme Court’s ruling is closely watched because its reasoning could apply to more than ten similar lawsuits now pending against other major Korean franchisors (e.g., BHC, Baskin-Robbins, Kyochon Chicken, Burger King). Trial teams: franchisees are represented by law firm YK (attorney Hyun Min-seok); Pizza Hut’s counsel is Lee & Ko (Taepyungyang).
