Chairman Yoon Hong-geun of Genesis BBQ is delivering a welcome speech at the Genesis BBQ Chicken Pension Happiness Ceremony held on April 21 at Lotte Hotel in Jung-gu, Seoul. Photo by Moon Ho-nam munonam@
[Asia Economy Reporter Moon Hyewon] Yoon Hong-geun, chairman of Genesis BBQ Group, has been cleared of allegations of verbal abuse and foul language against franchise owners.
On the 23rd, according to the franchise industry and legal circles, the 13th Civil Division of the Seoul High Court ruled in the appeal trial of the defamation and damages lawsuit filed by Chairman Yoon against whistleblower A and employee B in the "Bong-eunsa Station Branch Power Abuse Incident," stating, "The first trial's judgment is valid, so the appeal is dismissed." The appeals filed by A and B against Yoon and BBQ for damages were also dismissed as "without grounds."
The controversy began when franchise owner A reported to a broadcasting company in November 2017 that he had been subjected to verbal abuse and foul language by Chairman Yoon. After investigation, the broadcaster reported that Yoon had abused his power at the franchise.
According to BBQ, on May 12 of the same year, Chairman Yoon visited the BBQ Bong-eunsa Station branch to encourage the staff and found an employee working in the kitchen on the second floor without wearing a BBQ uniform. A dispute arose during the process of trying to enter the kitchen to verify this, as the employee tried to block him.
Chairman Yoon stated that although he made remarks such as "Hey, look at this person," he did not directly use verbal abuse or foul language.
On the other hand, A claimed that the employee working in the kitchen, without revealing their identity, requested Yoon to leave because no one was allowed to enter the kitchen, and during this process, Yoon allegedly said, "Do you know who I am? You are useless," using foul language and verbal abuse.
Later, A filed a complaint with the prosecution against Chairman Yoon and BBQ headquarters for obstruction of business, but the Seoul Central District Prosecutors' Office concluded the investigation with no charges against Yoon.
Despite the no-charge ruling, BBQ suffered significant damage, including consumer boycotts due to the power abuse controversy involving Chairman Yoon.
Therefore, in February 2018, BBQ and Chairman Yoon filed a lawsuit claiming 1.3 billion KRW in damages against A, B, and others for defamation due to false reports. Chairman Yoon denied making verbal abuse or foul language at the store.
The first trial court judged that "it is difficult to conclude that A's report that Chairman Yoon suddenly visited the franchise and used foul language and verbal abuse is false," but Yoon and BBQ appealed, and the result did not change. The appellate court upheld the first trial's judgment and ruled that the false interview by A's acquaintance "cannot be regarded as an illegal act directly causing defamation and causation to the plaintiffs."
The countersuit filed by A and B against BBQ and Chairman Yoon for damages, claiming violations of the Franchise Business Act, was also dismissed in both the first and second trials.
However, in the lawsuit filed against the acquaintance of a franchise owner who was not present at the scene on the day of the controversy but gave an interview as if witnessing the situation, the court recognized the defamation act by the acquaintance, confirmed the plaintiff's victory, and awarded 800 million KRW in damages.
A BBQ legal representative said, "Due to the enforcement of the Franchise Business Act, the development of social networking services (SNS), and the rapid increase in franchise companies, it has long been structurally impossible for franchisors to unilaterally hold a superior position over franchise owners and engage in 'power abuse.' Rather, in cases like this where franchise owners maliciously spread false information about franchisors, regardless of the truthfulness of the claims, the franchisor is inevitably the absolute weaker party."
He added, "In fact, due to this incident, BBQ suffered from the unfair stigma of being a 'power-abusing company' for several years, and consumer boycotts caused enormous damage to BBQ franchise owners nationwide. With the dismissal of the supplementary appeal, B's liability for damages was upheld in the appellate court, which is expected to play a positive role in raising social awareness against indiscriminate false information dissemination."
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