[DigitalToday reporter Shin-hye Ahn] Woowa Brothers, operator of Baedal Minjok, issued an official rebuttal over controversy surrounding its joint promotion, 'Baemin Only', conducted with Korea 1053, the franchiser of Cheogajip Seasoned Chicken.

Woowa Brothers said on Feb. 20 that content differing from the facts had spread about what it called sound business activity carried out based on the consent of most franchise owners. It said it strongly regretted harm to the company and to many franchise owners participating in the promotion.

Earlier on the day, law firm YK said it had filed a complaint with the Fair Trade Commission on behalf of the Cheogajip Seasoned Chicken franchise owners' council against Woowa Brothers and Korea 1053. It claimed the memorandum of understanding signed last month between Baemin and the franchiser constituted unfair trade practices, including abuse of a dominant market position, exclusive dealing and a deceptive fee settlement method.

Law firm YK said Baemin, through the MOU with the franchiser, promised fee cuts and discount support benefits by lowering the brokerage fee from 7.8 percent to 3.5 percent on the condition of exclusive dealing only with Baemin.

YK also said the agreement provided only minimal real economic benefits to franchise owners while completely depriving them of opportunities to transact through other delivery apps. It said franchise owners would have to bear a serious hit from reduced sales.

YK raised an issue with the settlement method for the discount promotion. For example, it claimed that if chicken worth 30,000 won is sold for 22,000 won after an 8,000 won discount, Baemin would cover 4,000 won of the 8,000 won discount.

Woowa Brothers rebutted this, saying franchise owners can choose at any time whether to participate. It also said there are no disadvantages, such as exposure within the app, for stores that do not take part, and that it has no impact at all on public delivery apps, including Ttaenggyeoyo.

It also said claims differed from the facts regarding what law firm YK called an 'inflation of the discount sharing ratio'. Woowa Brothers said it always signs a contract with the franchiser before running a discount promotion, and that the franchiser proceeds after obtaining consent from franchise stores.

For the example discount promotion method, it said the cost-sharing structure is 2,500 won by the franchiser and 1,500 won by the store, with the platform (Baemin) additionally investing.

Woowa Brothers said the promotion is fair market competition activity aimed at increasing franchise owners' sales and profits. It said it concentrates benefits including lower brokerage usage fees and discount support by the franchiser and delivery platform for stores that voluntarily express their intention to participate in the joint promotion.