By Kim Se-jeong
A court in Seoul turned down Monday a demand from Mr. Pizza, a major pizza chain, to shut down one of its franchise stores that publicly criticized the firm for allegedly abusing its authority.
The Seoul Central District Court said the store had “good reasons” to complain about the company, therefore the demand was inappropriate.
MPK Group, the operator of Mr. Pizza, sued the owner of the store in Seoul, surnamed Lee, after he criticized the company’s business practices during an interview with a local news outlet in February.
The owner said at that time Mr. Pizza refused to share the financial burden stemming from promotional events and solicited money from individual stores for advertising and “royalties.” He also insisted that because of this practice, almost 200 store owners wanted to sell their businesses. Mr. Pizza has almost 430 franchise stores across the country.
The MPK Group reacted furiously.
Accusing Lee of slander, the company attempted to discontinue the franchise contract with Lee and stopped supplying ingredients. Lee asked the firm to resume supplies, but the company took the matter to the court, asking it to close the store.
The court, however, said the company’s failure to disseminate information on how to spend money caused store owners to speculate and feel unstable about their businesses. Regarding the store owners who expressed their wishes to sell their business, the court ruled in favor of the store owners.
“Although the number of store owners who wished to sell their businesses could have been exaggerated, we found that this wish exists.”
Last year, 138 store owners filed a complaint with the Fair Trade Commission, complaining that MPK Group was not transparent in sharing financial information, which hurt the businesses of individual stores. The stores were asked to return 4 percent of their monthly revenue to the firm for advertising.
Originated in Japan, Mr. Pizza first opened in Korea in 1990.