South Korean lawmakers, led by People Power Party Rep. Choi Seung-jae, are investigating Adidas Korea for possible violations of Fair Trade and Franchise Business Transaction regulations. The intervention comes in response to multiple franchisees’ outrage at Adidas Korea’s unilateral termination of franchise contracts, which was seen as part of the company’s restructuring focus on online and company-owned stores.
National Policy Committee members heard an appeal from the Adidas Franchisee Association regarding the unfairness of the contract termination procedure. As a result, it is anticipated that this subject will be covered during the National Assembly audit’s autumn session.
Adidas Korea underwent a business restructuring in January with a focus on online and company-owned locations. It made the decision to keep only 19 of the approximately 100 franchisees and close or combine the rest of the outlets. It formally informed the remaining franchisees that it would only provide goods until 2024.
Around 76 franchisees from all around the nation formed an association to address the matter following the unilateral notification of contract termination.
