Korea Franchise Industry Association moves to establish mutual aid cooperative, signs MOU with DB Insurance

Initiative aims to improve operating conditions for member companies and franchisees

The Korea Franchise Industry Association announced Thursday it had signed an MOU with DB Insurance and the Korea Group Insurance Federation to establish and operate a franchise mutual aid cooperative.

"Risks such as fires and liability accidents are difficult for small franchisees to handle on their own, but if the more than 9,000 franchise headquarters and some 380,000 franchisees join together, the burden can be significantly reduced," association Chairman Na Myeong-seok said. "With today's MOU putting an insurance safety net in place, we will do our utmost to establish the cooperative as quickly as possible."

The association signed the MOU to lay the groundwork for a mutual aid and insurance program. Na had presented the establishment of a franchise mutual aid cooperative as a key vision when he took office in January. In May, the association also signed a financial support agreement with Industrial Bank of Korea.

The cooperative is designed to improve operating conditions for franchise headquarters and franchisees through a range of support measures, including loans, guarantees for damage compensation, and relief from various insurance premium burdens.

Under the agreement, the association will build the foundation for establishing and operating the cooperative and promote its mutual aid products to member companies. DB Insurance will handle all contract and claims operations, while the Korea Group Insurance Federation will provide on-the-ground support for insurance enrollment.

The association said pooling franchise headquarters and franchisees through the cooperative would allow premiums on essential products — such as fire mutual aid coverage — to be lowered. A portion of sales commissions is planned to go toward operating and growing the cooperative.

About 20 people attended the signing ceremony, including Chairman Na, DB Insurance Division Head Choi Hyeok-seung and Korea Group Insurance Federation Representative Kim Dong-san.

spa@heraldcorp.com