Since 2019, the Korea Fair Trade Commission (KFTC) has transferred authority regarding dispute mediation and franchise information disclosure registration to local governments to alleviate administrative bottlenecks and expedite victim relief. While the Seoul Metropolitan Government has improved administrative efficiency following this transfer, limited investigative jurisdiction and coordination challenges with the central government have hindered proactive law enforcement. This study analyzes the current status of Seoul’s fair trade policies, identifies structural limitations through empirical analysis, and proposes evidence-based policy interventions.
Although Seoul implements specialized policies, the lack of investigative power prevents the effective enforcement of administrative sanctions against substantive unfair practices, such as providing false or exaggerated information. Furthermore, structural constraints, including a shortage of specialized personnel and insufficient cooperation with the KFTC, have led to a concentration of dispute cases at the Korea Fair Trade Mediation Agency, reducing the efficacy of local governance.
An empirical analysis of the survival factors of franchise brands in Seoul revealed a five-year survival probability of approximately 59.4%. Notably, the 1+1 company-owned store requirement (requiring franchisors to operate at least one company-owned store for at least one year) introduced in 2021 was found to have no statistically significant effect on reducing the risk of brand exit. In contrast, a history of legal violations by the franchisor doubled the risk of closure, while operating multiple brands was associated with a higher survival rate due to risk diversification.
Based on these findings, four major problems were identified: (1) a 54.6% decrease in dispute mediation cases in Seoul from 2020 to 2024, (2) partial enforcement authority resulting from the absence of investigative powers, (3) insufficient systematic cooperation with the KFTC, and (4) structural limitations of the current Information Disclosure Statement, which fails to effectively convey brand-specific risks.
To enhance policy effectiveness, this study proposes the following. First, establishing a system to prioritize the transfer of Seoul-based dispute cases to the city government and linking counseling services to mediation. Second, actively utilizing collaborative policy tools—namely, administrative guidance and administrative support—to bridge the authority gap while preserving the autonomy and trust of market participants.
Third, building a robust cooperation framework through regular joint surveys and personnel exchanges. Fourth, introducing a “Seoul-type Information Disclosure Platform” and a “Franchise Brand Evaluation System,” both designed to prioritize empirically derived risk information, to support rational decision-making by prospective franchisees.