South Korea is located in Eastern Asia on the southern half of the Korean Peninsula just west of Japan, bordering North Korea, the Sea of Japan, and the Yellow Sea. It is slightly larger than Indiana and covers an area of 99,720 sq. kilometers. South Korea’s total population is about 49 million and growing at about 0.18% with 83.2% living in urban areas. The South Korean capital of Seoul has a population of about 10.3 million with other major cities including Busan (3.7 mil), Daegu (2.5 mil), Incheon (2.6 mil), and Gwangju (1.4 mil). South Korea is a republic and the people are a mix of Christian and Buddhist. The primary language is Korean, but English is increasingly favored as a second language and is widely taught in junior high and high school. The local currency used is the South Korean Won.
South Korea has gone through an amazing period of economic growth since the Korean War in the 1950s. It is now comparable to some of the largest economies in the world with a GDP of more than 1.6 trillion and is becoming a more attractive area for foreign investment. Its main trade partners are China, Japan, the US, Hong Kong, and Saudi Arabia. Its primary imports are machinery, electronics and electronic equipment, oil, steel, transport equipment, organic chemicals, and plastics. Exports consist of semiconductors, wireless telecommunications equipment, motor vehicles, computers, steel, ships, and petrochemicals. South Korea’s GDP (Purchasing Power Parity) is $1.64 trillion and is growing at a real rate of 2% with an inflation rate of 4.7%. South Korea ranked 8 out of 185 countries in the World Bank Group’s Ease of Doing Business Ranking.
Disclosure laws: Franchising Laws Overview
- Franchisors are to provide all prospective franchisees, with a disclosure document at least 14 days prior to the execution of an Agreement or the payment of a fee .
- If the disclosure period above is not observed, the franchisee can demand a refund within two months after signing the Franchise Agreement.
- Franchisor shall renew its information disclosure document within 90 days after the end of its fiscal year.
- The parties shall exercise good faith in performance of their duties in connection with the management of the franchise.
- If the franchisor decides not to renew the agreement, it must notify the franchisee of such decision 90 days prior to the expiration of the agreement.
- If the franchisor wants to terminate the agreement based on the franchisee’s default, it must follow the procedures set out in the statute and the regulations.
- The franchisor must escrow the initial franchise fees.
- The franchisor must refrain from direct competition with the franchisee.
- Franchisors must register their disclosure statements with the Korea Fair Trade Commission (effective February 4, 2008).
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* CPI Score is published by Transparency International and relates to the perceptions of the degree of corruption as seen by business people and country analysts and ranges between 100 (highly clean) and 0 (highly corrupt).
**Ease of Doing Business Ranking is determined by the World Bank Group and is ranked out of a possible 185 countries. www.doingbusiness.org
Most recent statistics have been taken from the CIA World Factbook unless noted otherwise.
International Franchising Opportunities
After you have finished researching the international markets, learning international expansion strategies and best practices, and understanding the basics of international franchising law, IFA provides numerous opportunities for franchising internationally.