• The Korean Journal of Franchise Management
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• v.2 no.2
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• pp.1-23
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• 2011

The Freedom of Information System has been introduced into the society based on the Fair Trade Transactions Act, which was established by Fair Trade Commission (FTC) on May, 2002. However, the system itself has showed limitations in guaranteeing a reliability and transparency of the disclosure document. Thus, since February, 2008, FTC not only made franchisors to register disclosure documents but also adopted the Disclosure Document Registration System, which forced them to provide registered disclosure documents to franchise applicants and franchisee. Franchisors consider the newly adopted Disclosure Document Registration System a restrictive system. However, considering the recent trend of fast growing franchising industry and the importance of being competitive, franchisors need to utilize the disclosure documents to promote their business and to gain trusts from franchise applicants by providing truthful information. In that way, franchisors will be able to establish a foundation that franchising industry might be successful and reduce the agency fee by cutting out conflicts with franchisees. Thus, this study aims to study the ways of effective preparation of disclosure document and its utilization from a franchisor viewpoint.