CJ Foodville Penalized by Fair Trade Commission for Deceiving Prospective Franchisees About 'Franchise Business Act Violations'

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The franchisor of Tous Les Jours, CJ Foodville, has been sanctioned by the Fair Trade Commission for concealing the fact of losing a civil lawsuit related to violations of the Franchise Business Act from prospective franchisees.

On the 4th, the Fair Trade Commission announced that it decided to impose corrective orders and notification orders to franchisees on CJ Foodville for its deceptive information provision.

According to the Fair Trade Commission, despite receiving a final judgment of defeat in a civil lawsuit related to violations of the Franchise Business Act on November 25, 2021, CJ Foodville provided disclosure documents that did not include this fact to a total of 124 prospective franchisees from December 28, 2021, to July 3, 2022.

The fact of losing a civil lawsuit related to violations of the Franchise Business Act is a fact that significantly affects the conclusion and maintenance of franchise contracts. Providing disclosure documents that omit this fact to prospective franchisees constitutes deceptive information provision under Article 9, Paragraph 1, Subparagraph 2 of the Franchise Business Act.

The Fair Trade Commission expressed hope that "this measure will raise awareness among franchisors to provide accurate information that significantly affects prospective franchisees' decisions to conclude and maintain franchise contracts, thereby protecting the rights and interests of franchisees."