SPC Paris Baguette Franchise Owners Angry After Nono Conflict Fallout

Franchisee Association "Bakers Angry Over 'Boycott Movement'"
"30% of Store Owners Earn Less Than 3 Million Won Monthly"
"Monthly Burden Up to 6 Million Won... Asking for Mutual Growth"

A Paris Baguette store in Seoul.

[Asia Economy Reporter Moon Hyewon] The fallout from the 2017 illegal employment issue at SPC Group's Paris Croissant, which sparked labor conflicts at Paris Baguette, is now affecting self-employed franchise owners as well. After establishing a subsidiary called ‘PB Partners’ and directly employing about 5,300 bakers and caf? staff, SPC increased their wages by approximately 40% over four years and improved their annual salaries and welfare benefits to the same level as Paris Baguette employees. However, issues such as promotion discrimination and pressure to leave the union have emerged, leading union members to launch a boycott of Paris Baguette products.

According to industry sources on the 25th, the Paris Baguette Franchise Owners Association recently issued a statement expressing anger over the participation of bakers belonging to the Korean Confederation of Trade Unions (KCTU) National Federation of Textile, Chemical, Food, and Allied Workers’ Unions Paris Baguette branch in the ‘Bread Bread Delicious Neighborhood Bakery Support Challenge,’ which promotes boycotting Paris Baguette products and using local bakeries. The statement called for responsible measures to remove organizational and management elements harmful not only to the headquarters but also to franchise stores, in cooperation with the two major unions, to ensure a sustainable Paris Baguette.

One Paris Baguette franchise owner appealed on social media, saying, "Over the past four years, the service fees for bakers have been increased by more than 40%, and currently, the monthly burden on franchise owners ranges from 4 to 6 million KRW. About 30% of franchise owners earn less than 3 million KRW per month, yet the bakers affiliated with the KCTU Paris Baguette branch are promoting not to buy the bread I make because it tastes bad, while demanding higher salaries from Paris Baguette, which is absurd." The owner added, "The KCTU bakers should also work towards coexistence with franchise owners as they claim to seek coexistence with the company. Otherwise, we will dissolve PB Partners and seek a way to directly employ bakers."

The starting salary for Paris Baguette bakers is known to be around 3.1 million KRW per month. The company states that their welfare benefits are provided at the same level as those for headquarters employees, including a daily meal allowance of 7,500 KRW, vacation pay up to 1 million KRW depending on length of service, annual child education expenses up to 4 million KRW, welfare points worth 1.3 million KRW per year, comprehensive health checkups, childbirth congratulatory money, and support funds ranging from a minimum of 20 million KRW to a maximum of 100 million KRW when opening a franchise store.

Currently, Paris Baguette franchise owners bear 70% of the bakers’ salaries.

SPC finds itself in a difficult position. An SPC official said, "We discuss welfare improvements, guaranteed days off, and maternity rights protection annually through collective agreements with the representative labor union. We have not interfered with union activities and have not discriminated against specific union members."

Industry insiders view this issue as a power struggle between the two major labor unions. As about 1,000 bakers who opposed KCTU activities formed a separate union affiliated with the Federation of Korean Trade Unions (FKTU), reducing KCTU’s influence, the Textile Union is seeking to expand its union power by demanding individual bargaining rights and full-time union officials. The KCTU union initially had about 700 members, but after the FKTU-affiliated union was established, its membership shrank to around 200. Meanwhile, the FKTU union grew to about 4,000 members, securing the status of the representative bargaining union. The KCTU union continues to demand individual bargaining rights from management.