South Korea's Top Fried Chicken Chains Kyochon, bhc, BBQ Face FTC Antitrust Probes

South Korea's leading fried chicken chains Kyochon, bhc, and BBQ face antitrust probes by the Fair Trade Commission (FTC) for potential unfair business practices, chiefly concerning franchise fee collection, amidst national concerns over rising consumer goods prices.

The country’s Fair Trade Commission (FTC) confirmed on Tuesday, July 18, that Kyochon, bhc, Genesis BBQ, and other fried chicken franchise operators are facing antitrust probes. The agency said it would be checking the companies to see if they have engaged in unfair business practices, especially with franchise fee collection.

The antitrust watchdog said the restaurant brands may have collected exorbitant fees from their franchisees, which caused the price hikes for food items in the restaurants. As per The Korea Times, the investigation is part of the national government’s efforts to put a stop to the rising prices of consumer goods.

It was revealed that the FTC had already started inspecting the trade practices of more than 200 franchise businesses that, include Kyochon, bhc, and Genesis BBQ. The agency will also look into these brands’ 12,000 franchisees, and the probes are expected to continue until Sept. 27.

The popular fried chicken restaurant brands have confirmed the ongoing investigations. Based on any anomaly that they will find, officials said they may charge the companies with possible violation of the Franchise Act.

"The FTC inspected us on the same issue two years ago,” an official of bhc said. “This is an annual practice that all franchise companies go through. We will accept the inspection as it is our responsibility."

A Genesis BBQ executive also stated, "It is the FTC's job to keep an eye on our business, whether we are doing well or not. People may think the government is pressuring fried chicken franchise firms to lower prices but the inspection has been conducted every year."

Meanwhile, in April, fried chicken franchises were under pressure to retain their prices. This comes after the government asked them not to raise costs to help the consumers amid the high inflation. It should be noted that restaurants' implementation of price hikes is the leading reason for the FTC’s move to check on bhc, BBQ, Kyochon and the others for the fees they are collecting from their franchisees.

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