South Korea

South Korea had the world’s second-fastest growing economy from 1960 to 1990. Korea’s transformation into a developed country during this time was termed the Miracle on the Han River, and South Korea was considered one of the Four Asian Tigers. The growth surge was achieved by paying low wages to manufacture labour-intensive goods, aimed at export. South Korea is a member of the OECD, and is classified as a High-income economy by the World Bank and an Advanced economy by the IMF and CIA and a Developed market by the FTSE Group. However, it is still considered an emerging market by MSCI due to lack of full convertibility of the won, the rigidity of the identification system, and anti-competitive practices.

Demographic Data

Economic Data

Cultural & Other Data

GDP (PPP, $bn)

1278

Capital

Seoul

Area (sq. km.)

98,480

GDP Real

Growth (%)

2.5

Other Large Cities

Busan, Daegu, Incheon, Gwangju

Population (million)

48.5

PerCap GDP ($)

26,000

Primary Language

Korean

Population

Growth %

0.266

Prime Lending

Rate (%)

7

Urban

Population %

81

% Population

Under 15yrs

16.8

Inflation Rate%

4.7

Urban Growth %

0.6

Population below

poverty line (%)

15

Unemployment%

3.2

Literacy

(% of population)

97.9

Agricultural Workers

(% of population)

7

Foreign Direct

Investment($bn)

103.7

Education spending

as % of GDP

4.6

Industrial Workers

(% of population)

25

Debt-External

($bn)

380.5

CPI Score

(1-10)*

5.6

Service Workers

(% of population)

68

Exports ($bn)

419

Corporate Income Tax %

22

Labor Force (mil)

24.35

Imports ($bn)

435

Ease of Doing

Business Ranking **

23

CURRENCY EXCHANGE RATE

05/27/09 $1 = 1265 KRW

Franchising Laws Overview

Disclosure laws:

  • 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.

Relationship laws:

  • 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.

Registration Laws:

  • Franchisors must register their disclosure statements with the Korea Fair Trade Commission (effective February 4, 2008).
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