‘No’ to Starbucks, but ‘yes’ to Ediya?

Controversy over the equity of

“Act on Revitalization and Prosperity of Local Business”

Logo : Startbucks

Concerns are growing in the food service and distribution industry ahead of the enforcement of the “Regional Commercial Area Act”. Even in the same retail segment, there are controversies over "equity" and "reverse discrimination" as the company-operated stores are restricted and franchisees are excluded under this law.

As the new law, “Act on Revitalization and Prosperity of Local Business,” is passed in the Cabinet. From April 2022, direct-managed stores such as Starbucks and Olive Young are expected to have difficulties entering in prime hotspot corners in commercial district.

Under this law, merchants in areas where property prices have increased rapidly will be able to join together and vote on the arrival of another store. But areas where property prices are rising usually are so-called the ‘hotspot’ commercial districts. Therefore, if the “Act on Revitalization and Prosperity of Local Business” is implemented, corporate stores such as Starbucks will need to obtain ‘permission’ from the local small business owners in advance to open new stores. Controversy over ‘equity’ arises as it gives superior authority to one side only.