Pizza Hut Franchise Owner: "Pizza Hut Abuses Rehabilitation to Avoid Returning 21 Billion Won Difference in Franchise Fees"

Pizza Hut franchisees have urged Pizza Hut, which has filed for rehabilitation, to return the difference in franchise fees. They claim that Pizza Hut is abusing the rehabilitation process to delay the enforcement of the court ruling.

Ninety-four Pizza Hut franchisees held a press conference on the morning of the 10th in front of the main gate of the Seoul Bankruptcy Court in Seocho-dong, Seoul, urging the Pizza Hut headquarters to return the difference in franchise fees and take responsible management. Provided by Pizza Hut franchisees

On the morning of the 10th, 94 Pizza Hut franchisees held a press conference in front of the main gate of the Seoul Rehabilitation Court in Seocho-dong, Seoul, stating, “The rehabilitation process is not merely a measure for business normalization but an attempt to evade legal responsibility.” They alleged that the headquarters has repeatedly avoided fulfilling the court’s order to return the difference in franchise fees by evading the obligation to deposit funds and only filing appeals to the Supreme Court and requests for provisional suspension of execution.

They particularly appealed that many franchisees continue to suffer due to the headquarters’ failure to comply with the ruling. The excessive discount promotions, advertising fees, royalties, and administrative fees imposed by the headquarters have exacerbated the operating losses of the franchises, resulting in more than half of the franchise stores being sold or closed.

The franchisees demanded responsible management from the headquarters. They urged, “The headquarters must return the difference in franchise fees unfairly collected and stop the unreasonable cost shifting so that franchisees can continue their operations.” They emphasized, “The headquarters should demonstrate a responsible attitude to return the unfairly collected difference in franchise fees and guarantee the legitimate rights of the franchisees.”

Hyun Min-seok, a lawyer from YK Law Firm representing the franchisees, said, “The difference in franchise fees is not a simple distribution margin but corresponds to a franchise fee separately stipulated under the Franchise Business Act. The difference in franchise fees collected by the franchisor from the franchisees without agreement is an unjust enrichment without legal grounds, and it is reasonable to return it to the franchisees who paid it.”

Earlier, Korea Pizza Hut filed for rehabilitation at the Seoul Rehabilitation Court on the 4th of last month, citing financial difficulties after losing a lawsuit filed by franchisees demanding the return of the difference in franchise fees and being ordered to pay 21 billion won. In September, the Seoul High Court ruled that Korea Pizza Hut must return 21 billion won to 94 franchisees, stating that “the headquarters collected the difference in franchise fees without the consent of the franchisees.”