On May 10, the FTC's secretariat announced that it had sent a review report detailing the alleged violations of the Franchise Business Fairness Act to the accused party on May 8, which included findings on the actions, legality, and recommendations for corrective measures.
Myungnyun-dang has been under investigation by the FTC since September 2025, following allegations that it provided high-interest loans to franchise owners through a lending company it established after securing low-interest loans from the Industrial Bank of Korea.
According to the FTC, Myungnyun-dang allegedly offered loans for franchise setup without adequately considering the financial situations of franchisees. Notably, franchise owners were reportedly burdened with costs for interior construction and equipment that exceeded actual payments.
Evidence also suggests that Myungnyun-dang coerced franchisees into using specific suppliers for necessary services, including interior construction and equipment installation.
Furthermore, despite providing credit or facilitating loans for franchisees, Myungnyun-dang inaccurately reported 'no relevant information' in the disclosure documents regarding credit provision and facilitation, which are mandatory disclosures.
The examiner classified Myungnyun-dang's actions as providing unfair disadvantages, restricting trading partners, and offering false and misleading information. Recommendations for corrective orders, fines, and prosecution have been proposed.
An FTC official stated, "We are ensuring that the accused party has ample opportunity to defend itself by allowing the submission of written opinions and requests for evidence review and copying. The committee will make a final decision after deliberation."
* This article has been translated by AI.
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