Policy funds to block 18% franchise loans after Myeongryundang case

The government is tightening oversight of how franchisors use policy funds to prevent a repeat of the Myeongryundang case. The measure targets a practice in which a franchise headquarters borrows government-backed policy funds at a low rate and then offers loans to franchisees at around 18% interest. The aim is to stop policy money, intended to support franchise outlets, from being used as a profit-making tool by franchisors. If a similar case is confirmed again, the supply of policy funds to the relevant franchise headquarters may be suspended. The move is expected to reduce the financing burden on franchisees and protect the public purpose of policy funds. Source: yna.co.kr