Start-up & business operations
How to Register a Franchise Disclosure Document — The 1-Year Directly Operated Store Rule and Annual Amendment Deadlines
A franchisor that wants to recruit franchisees must register the disclosure document it will give to prospective franchisees in advance, and this duty applies equally to small franchisors with low sales. If the principal office is in Seoul, Incheon, Gyeonggi or Busan, the application goes to that city or province; otherwise it goes to the Fair Trade Commission. A new registration is accepted only if the franchisor has operated a directly operated store under the same brand for at least 1 year. The registration certificate is issued within 30 days of the application, and after registration, changes and each fiscal year's financial information must be filed as amendments within the set deadlines.
Procedure
1. Check the directly operated store requirement
A new registration is accepted only if the franchisor has run a directly operated store with the same brand and business method as the franchise described in the disclosure document for at least 1 year. Periods during which an officer serving at the time of application ran the store are counted. The requirement does not apply if the franchisor holds a permit, license, report or registration under related laws, or has run the same type of business in Korea or abroad for at least 1 year.
2. Identify the registering authority
If the principal office is in Seoul, apply to the Mayor of Seoul; in Incheon, to the Mayor of Incheon; in Gyeonggi-do, to the Governor of Gyeonggi-do. Regions designated by the Fair Trade Commission (Busan under the current form) file with that mayor. All other regions apply to the Fair Trade Commission, and applications can also be filed online through the Franchise Information System.
3. Prepare the disclosure document
The disclosure document consists of a cover, a table of contents and the items in Annex 1 of the Enforcement Decree, and a separate document is made for each brand. It covers the franchisor's general status and financial information for the previous 3 fiscal years, numbers of franchised and directly operated stores and average sales, law violations, franchisee costs, business conditions and opening procedures, and training.
4. File the new registration and supplement it
Attach the disclosure document (paper and electronic file), financial statements, a list of directly operated and franchised stores, the franchise agreement form, proof of the number of employees and proof of directly operated store operation to the new registration application. The authority issues the certificate within 30 days of the application; if items are missing or untrue, it may request a change or supplement once, and the date of supplementing becomes the new application date.
5. Amendment registration and amendment report
Items such as the trade name, principal office and representative must be amended within 30 days of the change; numbers of franchised and directly operated stores within 30 days after each quarter ends; and financial information within 120 days after each fiscal year ends. The processing period for an amendment registration is 20 days, and minor items such as changes of officers other than the representative are reported within 30 days after the quarter ends.
Required documents
- Application for new registration of a disclosure document
- Disclosure document (paper and electronic file)
- Statements of financial position and income statements for the previous 3 fiscal years (or documents showing sales if not prepared)
- List of directly operated and franchised stores as of the end of the previous fiscal year
- Copy of the franchise agreement form
- Document showing the number of officers and employees as of the end of the previous fiscal year
- Document confirming the operation and operating period of the directly operated store
- Letter of authorization (when filed by an agent)
Fees
There is no fee for registering a disclosure document. Business reports and permits needed to open franchise outlets are quoted per business type after consultation.
Legal basis and review date
- Fair Transactions in Franchise Business Act, Article 2
- Fair Transactions in Franchise Business Act, Article 3
- Fair Transactions in Franchise Business Act, Article 6-2
- Fair Transactions in Franchise Business Act, Article 6-3
- Fair Transactions in Franchise Business Act, Article 6-4
- Fair Transactions in Franchise Business Act, Article 7
- Enforcement Decree of the Fair Transactions in Franchise Business Act, Article 4
- Enforcement Decree of the Fair Transactions in Franchise Business Act, Article 5-2
- Enforcement Decree of the Fair Transactions in Franchise Business Act, Article 5-3
- Enforcement Decree of the Fair Transactions in Franchise Business Act, Article 5-5
- Enforcement Decree of the Fair Transactions in Franchise Business Act, Annex 1-2
Check these first
- In principle, a franchisor may not receive franchise fees or sign a franchise agreement until 14 days have passed since delivering the registered disclosure document and the nearby franchise store list.
- If the disclosure document or attachments contain false information, registration is refused, and if a registration made with false information is discovered, it is cancelled.
Frequently asked questions
Does a small franchisor with only a few franchisees have to register a disclosure document?
Can we recruit franchisees right away without a directly operated store?
Where do we register if our head office is in Incheon?
When must a registered disclosure document be amended?
What does the administrative agent's office handle?
Contact us
Hwang Yunsang Administrative Office in Songdo, Incheon prepares and submits administrative documents and explains the procedure. If your situation is similar, send us a message.
📍 2697, 26F POSCO Tower-Songdo, 165 Convensia-daero, Yeonsu-gu, Incheon, Republic of Korea · 📞 010-3374-2687 · 🌐 hwangadmin.com
This guide is general information based on public sources. Requirements, documents and deadlines differ by case and by the competent agency, so please confirm them before you proceed.
