Baek Jong-won Theborn Korea 'Yeondon Bolkatsu' Franchisees 8 Claim
"Head Office Inflated Expected Sales and Profit Margins"
Theborn Korea States "Presented Objectively and Rationally"
Store owners of 'Yeondon Bolkatsu,' a brand under Theborn Korea, are drawing attention by taking collective action, demanding CEO Baek Jong-won's guarantee of a minimum profit margin. On the 18th, Hankyoreh reported that "Yeondon Bolkatsu store owners plan to take collective action, including filing a complaint with the Fair Trade Commission and holding a rally in front of Theborn Korea headquarters." The store owners claim, "The headquarters recruited franchisees by promising false and exaggerated sales figures and profit margins, causing damage, yet they have not presented any countermeasures."
Yeondon Bolkatsu is a brand that originated from the pork cutlet restaurant 'Yeondon,' which gained attention through SBS's 'Baek Jong-won's Alley Restaurant' in 2018. Later, CEO Baek relocated Yeondon to a building right next to 'Hotel Theborn' in Seogwipo City, Jeju, which he operates. From 2021, he started the franchise business under the name 'Yeondon Bolkatsu,' and in 2022, began actively recruiting franchise stores nationwide.
However, the store owners claim that when recruiting franchisees, Yeondon Bolkatsu headquarters inflated the expected sales figures and profit margins. Store owner A told Hankyoreh, "I trusted the headquarters, which presented a monthly expected sales figure of 30 to 33 million KRW, and opened a store spending over 100 million KRW, but the actual sales were less than half, around 15 million KRW. They said the profit margin would be 20-25%, but it was only about 7-8%." There were also claims that the cost ratio was around 45%, higher than the 36-40% indicated by the headquarters. Considering rent, operating expenses, and delivery fees, there is nothing left.
According to the franchise business disclosure document registered with the Fair Trade Commission, the average annual sales per Yeondon Bolkatsu store dropped nearly 40%, from 259.7 million KRW in 2022 to about 156.9 million KRW last year.
The store owners also pointed out that despite repeatedly requesting the headquarters for new menu development, price reductions on essential supplies (water fees), and price increases, there were no significant countermeasures. Store owner B lamented to CEO Baek, "You claim to be a savior of the food service industry, so why are you neglecting your own brand?" Eight store owners plan to hold a rally in front of Theborn Korea headquarters on the afternoon of the 18th and submit a complaint to the Fair Trade Commission.
In response, Theborn Korea reportedly denied the claims, stating, "At the time of contract signing, we objectively and reasonably presented the average sales, cost ratios, and profits and losses of stores nationwide, so there was no false or exaggerated information. The average monthly sales of franchise stores are high compared to similar takeout brands, and we have done our best, including reducing the supply price of major menu raw materials by an average of 15% from November 2022 to August 2023."
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