Seoul, Nov 17: South Korea’s antitrust regulator said Thursday it has decided to impose a $523,000 fine on the local operator of Domino’s Pizza for unfair business practices.
The penalty on Cheong-O DPK Co., which holds the exclusive rights to the popular global pizza chain in Sejong, came as the company made its franchise shops take all the burden of costs needed for renovations, the Fair Trade Commission (FTC) said, Yonhap news agency reported.
The FTC said 70 Domino’s outlets renovated their shops between 2014 and 2021 with a total cost of 5.1 billion won without receiving any support from the operator.
The remodeling project came after the brand’s US headquarters adopted the “theater” business model, in which customers are allowed to watch employees prepare food through open kitchens.
Under South Korean law, franchise operators are obligated to share 20 per cent of the costs when their shops go through a renovation. The amount can go up to 40 per cent if the remodeling involves a relocation.
The FTC also ordered Cheong-O DPK to pay 1.52 billion won of the costs to its shops that went through renovations over the period.
