Since a sales area is critical to the sales of a franchisee, the current Act prescribes that a sales area for a franchisee shall be stated in a franchise agreement, and that no franchiser shall open a direct retail store or another franchise store within the sales area for the franchisee during the period of franchise agreement without just grounds (Article 12-4 (3)).

Where a franchiser establishes a store such as an agency selling commodities or services that are in competition with those of a franchisee within the sales area for the franchisee, however, such action is hard to regulate as an infringement of sales area although that constitutes a de facto infringement.

In response, this Amendment aims to further strengthen the right to do business of a franchisee by prohibiting a franchiser from establishing a store selling commodities or services that are in competition with those of a franchisee within the sales area of the franchisee (Article 12-4 (3)).

Prohibit a franchiser from establishing a store selling commodities or services that are in competition with those of a franchisee within the sales area of the franchisee (Article 12-4 (3)).