Order app era, customized terms of service and privacy policy for F&B franchises.

Law firm Veat received a request from F&B franchise company A (hereinafter referred to as "the client") and drafted Terms of Use and Privacy Policy for a delivery-only application and a proprietary brand ordering application.

As digital transformation accelerates, companies are expanding their offline customer touchpoints to online platforms, and particularly in the F&B (food and beverage) industry, they are strengthening their connections with consumers through delivery-only apps or proprietary ordering apps. Accordingly, legal infrastructure for platform operation, especially the 「Act on Regulation of Standard Contract Terms」(hereinafter referred to as "Standard Contract Act"), the Personal Information Protection Act, and the 「Act on the Protection and Use of Location Information」(hereinafter referred to as "Location Information Act"), are becoming increasingly important.

Law firm Veat focused on establishing a Terms of Use system that realistically operates by reflecting the client's actual operating methods, in addition to the conventional clauses of the Terms of Use and Privacy Policy. In particular, it focused on drafting clauses related to point accumulation and usage structure, whether delivery riders are outsourced, the possibility of product disposal, the use of location information, and personal information processing outsourcing.

Drafting Terms of Use based on the Standard Contract Act

The Terms of Use of an ordering app is a key document that defines the rights and obligations between the client and the platform, and should reflect the main provisions of the Standard Contract Act, which focuses on consumer rights protection in the e-commerce environment, to ensure fairness and transparency. Law firm Veat, in addition to the general Terms of Use items, also incorporated the following elements into the Terms of Use, considering the client's unique service structure.

※ Clauses related to point accumulation and usage

When adopting a structure of accumulating points upon ordering and using them as a discount, specific and clear provisions regarding point accumulation conditions, validity period, expiry conditions, and whether a cash refund is possible must be included in the Terms of Use. These matters serve as a key criterion for judging the fairness of the Terms of Use and the fulfillment of the obligation to provide prior notice in the event of consumer disputes, and also play an important role in consumer protection.

※ Clauses related to employment of delivery riders and service outsourcing

When directly providing delivery services or operating a dualized system through a third-party delivery agency, clear clauses must be drafted in the Terms of Use regarding the scope of responsibility for providing services, obligations to notify consumers, and the party responsible in the event of an accident during the delivery process. This goes beyond simple civil liability for damages and can also be linked to issues of joint or several liability under the Consumer Protection Act and the Personal Information Protection Act, making it important to take proactive measures to reduce legal risks.

※ Clauses related to order changes/cancellation and receipt confirmation

In the case of a food delivery service, where products may be discarded if a certain amount of time has passed after ordering, it is necessary to clearly define in the Terms of Use receipt confirmation notices, the time during which order changes and cancellations are possible, the disposal procedure if the consumer does not receive the order, and the conditions under which a refund is not possible. These clauses are directly related to the establishment and termination/cancellation requirements of contracts under the Electronic Commerce Act and act as a key element to protect the rights of users in the process of electronic contract conclusion while reasonably adjusting the responsibilities of the business operator.

Drafting Privacy Policy based on the Personal Information Protection Act and the Location Information Act

The importance of personal information protection is increasingly emphasized, and in particular, online platforms require legal compliance throughout the entire process, including information collection and use based on user consent, third-party provision, processing outsourcing, and disposal procedures. Law firm Veat, based on the essential notice items under the Personal Information Protection Act (collection items, purpose of use, retention and usage period, etc.), supplemented the Privacy Policy with the following items to match the client’s service structure.

※ Specificity regarding collection and use of personal location information

If the app allows users to directly set their delivery location or automatically recommends addresses based on real-time location, this may constitute collection and use of personal location information. At this time, the basis for collecting location information, the purpose of use, the retention period, and the procedure for withdrawing consent must be clearly explained in accordance with the Location Information Act and the Personal Information Protection Act. In particular, location information requires a higher level of protection equivalent to sensitive information, so it is important to write the consent method and notice content clearly. Legal and practical considerations are essential to provide users with sufficient information and obtain clear consent.

※ Specificity of personal information processing outsourcing

Various operating functions, such as payment services, server operation, authentication, delivery agency, customer service, and order management, are often outsourced to external companies. In these cases, it is important to specifically mention in the Privacy Policy the content of each outsourcing task, the information of the outsourcee, and measures to ensure safety. This is a necessary procedure to fulfill the obligations of notice and consent when outsourcing under the Personal Information Protection Act, as well as the obligations to manage and supervise the outsourcee.

※ Clear distinction of collection items and retention periods

The information collected during the ordering process is increasingly diversifying, including not only general order information such as name, contact information, and address, but also payment information, location information, and event participation history. Therefore, it is necessary to clearly distinguish the purpose of use and retention period for each item to guarantee the information subject’s right to know and secure the legal completeness of the Privacy Policy.

Law firm Veat provides legal advice specializing in ICT convergence legal fields, such as Terms of Use, personal information, and platform regulations, based on its expertise. We can provide more specialized legal services for personal information protection and data-related laws through the LegalTune (Personal Information Center) on the Law firm Veat official website.

This case study can also be viewed on the Law firm Veat blog.

- Customized Terms of Use and Privacy Policy for F&B Franchises in the Ordering App Era

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Law firm Veat