'Baemin Only' Promotion Ends After 6 Months... Cheogajip Yangnyeom Chicken Franchises Can Now Operate on Competing Delivery Apps

Low Consent Rate for Exclusive Promotion Leads to Failed Extension
Association: "Fair Trade Commission Ruling Needed to Prevent Similar Schemes"

Woowa Brothers, the operator of Baedal Minjok (Baemin), has ended its "Baemin Only" promotion, which offered to halve intermediary commissions for franchise owners who agreed to stop using competing delivery apps. The promotion concluded after six months.

While franchisees who participated in the promotion saw a noticeable increase in sales on Baemin, many did not achieve the expected overall profit boost due to revenue losses from being excluded from other delivery apps. As a result, franchise owners did not agree to extend the promotion, and the required consent rate for continuation was not met.

The Cheogajip Seasoned Chicken Franchise Owners’ Association (hereinafter "the Association"), which has opposed the promotion, stated, "Although the promotion has ended, a clear judgment from the Korea Fair Trade Commission is needed to determine whether Woowa Brothers and the franchisor Hangukilosaem violated the Monopoly Regulation and Fair Trade Act and the Fair Franchise Transactions Act to prevent recurrence."

On February 24th, franchise owners of Cheogajip Seasoned Chicken in Jongno-gu, Seoul, were seen holding pickets and chanting slogans after a press conference reporting Woowa Brothers' "Baemin Only" promotion to the Korea Fair Trade Commission. Participatory Solidarity Center

According to industry sources on August 31, Woowa Brothers and Cheogajip Seasoned Chicken’s franchisor Hangukilosaem entered into a strategic partnership memorandum of understanding (MOU), and the "Baemin Only" promotion, launched on February 9, ended on August 8 after franchisees opposed its extension, thus concluding after six months.

The Baemin Only promotion offered franchise owners a reduced intermediary commission from 7.8% to 3.5%, partial support for discount coupon costs, and preferential app exposure, on the condition that they refrained from using other competitor apps outside of Baemin.

The program was operated for three months on a trial basis starting February 9, and was extended once until August 8. However, when the franchisor sent a notice regarding extension, the target consent rate was not met during the follow-up approval process, leading to its termination.

Baemin stated, "This partnership program was intended to provide additional benefits and marketing support on the premise of the franchisees’ voluntary choice, with the goal of promoting order and sales growth together."

In reality, over 1,100 out of approximately 1,200 Cheogajip Seasoned Chicken franchise stores nationwide participated in the initial phase, which is over 90%. However, according to the Association, the commission cut did not translate into actual profit improvement.

Why did franchisees struggle despite a 50% commission cut?

According to the Association, issues experienced by participating franchise owners occurred outside of the commission rate itself.

The biggest issue was a decline in sales. The increased orders via Baemin could not compensate for the sales lost from being delisted on other delivery apps. Even with a 4.3 percentage-point commission discount, a drop in total orders inevitably resulted in lower income.

In the Seoul metropolitan area, where competition among delivery apps is more intense than in other regions, average profit within Baemin did rise due to more orders. However, some stores saw overall sales drop as they lost steady orders from other platforms.

Another problem was increased advertising costs. As all sales channels converged into a single platform, competition among same-brand stores intensified; consequently, the advertising expenses of some franchisees significantly increased compared to before the promotion.

The method of settlement for the discount promotion also posed problems. Woowa Brothers originally announced, "We will subsidize 4,000 won from each 8,000 won discount coupon," implying it would cover half the discount. However, in practice, only the portion exceeding 4,000 won was reimbursed, leaving franchisees to bear a fixed 4,000 won per coupon, while Woowa Brothers could set its contribution at a lower amount (1,000~3,000 won) by adjusting the total discount. For example, if a customer received a 6,000 won discount, only the 2,000 won above 4,000 would be reimbursed.

The Association stated, "At first glance, a 'half-price commission' sounded attractive, but the losses were omitted from the calculation," adding, "The core reason for our Fair Trade Commission report was that not enough information was provided to make an informed choice."

The promotion is over, but questions of legality remain

Earlier, on February 20, the Association reported Woowa Brothers to the Fair Trade Commission for abusing their market-dominant position, engaging in unfair trade practices, and for Hangukilosaem’s failure to comply with franchise information-provision obligations under the Fair Franchise Transactions Act. On February 24, the Association for a Fair Platform, the National Franchise Owners' Association, the People's Solidarity for Participatory Democracy, and the Lawyers for a Democratic Society’s Committee for Economic Justice held a press conference, filing similar complaints.

Further, on March 4, the Association submitted supplementary evidence highlighting the illegality of a notification from the franchisor, which informed participating franchisees that the head office would directly enforce "extended closure" settings on competitor platforms if the stores failed to do so within a set period.

On May 1, the Association issued an urgent statement calling for the suspension of the promotion’s extension and the preparation of genuine mutual benefit measures; on May 7, civic organizations demanded a swift Fair Trade Commission investigation and corrective action.

Law firm YK, representing the franchisees in their Fair Trade Commission complaint, identified three key violations by franchisor Hangukilosaem: firstly, using its superior bargaining power as a franchisor to induce collective participation among all 1,260 franchisees, thus collaborating in Woowa Brothers’ exclusive-conditional transaction (Monopoly Regulation and Fair Trade Act, Article 45, Paragraph 1, Clauses 4 and 7); secondly, concealing potential sales risk and legal liability associated with leaving competitor platforms while encouraging promotion participation (Fair Franchise Transactions Act Article 9); and thirdly, via a notice sent on February 24, threatening direct enforcement of long-term shutdowns on competitor platform accounts for noncompliant stores, which constitutes a violation of the Fair Franchise Transactions Act (Article 12, Paragraph 1, Clause 2) and a civil unlawful act.

As for Woowa Brothers, YK applied the following charges under the Monopoly Regulation and Fair Trade Act: "exclusion of competitors via exclusive-conditional transactions" (Article 5, Paragraph 1, Clause 5) as a market-dominant operator; "restraining conditional transactions" (Article 45, Paragraph 1, Clause 7) and "improper customer inducement" (Article 45, Paragraph 1, Clause 4) as unfair trade practices.

At a press conference titled 'Fair Trade Commission Report on Baemin Only Strengthening Monopoly and Infringing on the Choice of Small Business Owners and Consumers' held on the morning of February 24th at the Areumduri Hall on the 2nd floor of the People's Solidarity for Participatory Democracy office in Jongno-gu, Seoul, a placard criticizing the 'Baemin Only' contract was placed on the desk of Yeonju Lee, Secretariat of the People's Solidarity for Participatory Democracy's Livelihood Economy Team, who was presiding over the event. People's Solidarity for Participatory Democracy

The Association and its legal representatives insist that the above violations require legal judgment regardless of the promotion’s recent termination.

The Association commented, "The fact that the promised benefits never materialized was clearly reflected in the six months of figures," adding, "It’s welcome news that the event has ended, but that does not justify the actions taken thus far."

The Association further stated, "Exclusive-conditional marketing is not just a one-off for a single brand. Baemin previously attempted a similar exclusive agreement with Kyochon Chicken slated for June 2025, but it was canceled due to controversy over competition restrictions. This case is a renewed attempt; if allowed to end without a ruling, the same structure could repeat with other brands."

Additionally, the Association asserted, "A franchisee is an independent entrepreneur responsible for their own business and costs, and each franchisee is a direct party to the delivery app intermediary agreement. A public notice from the franchisor, stating that it would force competitor platform account suspensions on behalf of individual franchisees, itself potentially violates the Fair Franchise Transactions Act."

The Association also stressed, "It must be verified whether participation consent was truly based on sufficient information. The difference between the 90% initial participation rate and the far lower extension consent rate after six months demonstrates that the initial information provided was insufficient."

Hyun Minseok, attorney at Law Firm YK, representing the franchisees, stated, "The core issue in this case is that the platform operator borrowed the franchisor's superior status to collectively restrict each franchisee’s freedom to choose trading partners. This is not a simple dispute between a platform and store owners, but a structure with two overlapping positions of power, setting it apart from previous cases. While it’s fortunate the promotion was stopped, a legal assessment of the structure itself is essential to prevent recurrence with other brands."

Baemin: "No forced participation; 60% average sales growth...Exploring new cooperation models"

A Woowa Brothers spokesperson commented, "The program was not uniformly applied or forced upon franchisees—rather, it was selectively implemented based on individual consent. As each franchisee could exit the promotion at any time by choice, we do not consider it a restrictive conditional transaction that compelled the use of a particular platform against any franchisee's will."

The spokesperson added, "Within the delivery app market, collaborations between platforms and brands take various forms, including exclusive listings, exclusive promotions, or the provision of preferential terms or incentives based on specific partnership conditions."

"Through our partnership so far, Cheogajip Seasoned Chicken’s average order sales on Baemin have grown over 60%, and the brand’s overall revenue has soared to more than four times the overall chicken category’s growth rate, delivering meaningful achievements for both parties and franchisees," the spokesperson said. "Based on these successes, we are maintaining a cooperative relationship and are continually exploring new collaborative models."

This content was produced with the assistance of AI translation services.