Supreme Court Orders Pizza Hut Korea to Return Markups, Raising Franchise Industry Worries
Creatrip Team
2 months ago
The South Korean Supreme Court ruled that Pizza Hut Korea must return roughly 21.5 billion won charged as markup franchise fees collected from franchisees between 2016 and 2022, deeming the extra charges unjust enrichment because contracts lacked explicit consent. The decision affects fees where franchisors supply ingredients at above-wholesale prices (차액가맹금). Pizza Hut Korea is in corporate rehabilitation (restructuring) and financially distressed, making immediate repayment unlikely; claims will be handled as rehabilitation claims and their payout depends on the ongoing sale and restructuring process. The ruling could prompt similar suits across chicken, burger and coffee chains, as many franchisors charge such markups, and comes amid amendments to the Franchise Business Act that expand collective bargaining rights for franchisees (가맹점주 단체교섭권), raising uncertainty about on-the-ground negotiations and industry practices.
