"Deceived by Baek Jong-won's Name" vs "Never Promised False Sales" (Summary)

Store Owners' Association Holds Press Conference in Front of Theborn Korea Headquarters on 18th
Store Owners: "Sales Plummeting, Number of Franchise Stores Rapidly Decreasing"
Theborn Korea: "Claims Contrary to Facts Disrupt Business Operations"

Franchise owners of 'Yeondon Bolkatsu,' operated by Theborn Korea led by CEO Baek Jong-won, took to the streets amid scorching heat exceeding 32 degrees Celsius. Yeondon Bolkatsu is a franchise jointly created by Theborn Korea and 'Yeondon,' a pork cutlet restaurant that gained fame through the SBS variety show 'Baek Jong-won's Alley Restaurant.' The franchisees demanded, "The headquarters recruited franchisees through false and exaggerated advertisements but have ignored the decline in franchisees' sales and profitability, causing many franchises to fail," and called for "measures to ensure the survival of franchise owners."

In response, Theborn Korea stated, "There was absolutely no promise of exaggerated sales figures or profitability when signing franchise contracts," and added, "Some franchisees' claims that differ from the facts have caused serious disruptions to business operations."

The Yeondon Bolkatsu Franchise Owners Association and the National Franchise Owners Association held a press conference on the afternoon of the 18th in front of The Born Korea headquarters in Gangnam-gu, Seoul, to announce cases of damage suffered by Yeondon Bolkatsu franchisees. Photo by Im Onyu @ioy

Yeondon Bolkatsu Franchise Owners: "Profitability Decline Leading to Rapid Franchise Closures"

The Yeondon Bolkatsu Franchise Owners Association and the National Franchise Owners Association held a press conference on the afternoon of the 18th in front of Theborn Korea headquarters in Gangnam-gu, Seoul, to announce 'Yeondon Bolkatsu Franchise Damage Cases.' The franchisees claimed, "The headquarters recruited franchisees by promising false and exaggerated sales and profitability figures but have yet to present any countermeasures."

These franchise owners argued that due to a sharp drop in sales and rising costs, profitability has worsened, leading to a rapid decrease in the number of Yeondon Bolkatsu franchise stores. They stated, "According to confirmation with Theborn Korea headquarters, Yeondon Bolkatsu opened a total of 83 new franchise stores until last year, but as of April, only about 30 stores remain." According to Theborn Korea, as of June, the number of Yeondon Bolkatsu franchise stores stands at 35.

Sales of Yeondon Bolkatsu franchise advertised by The Born Korea

The owner of the Yeondon Bolkatsu Dangok Station branch said, "The promotional website advertised daily sales between 3.38 million and 4.68 million KRW, but sales began to plummet rapidly just one month after opening and are now at about 10%," adding, "After paying rent, taxes, and employee salaries from sales, there is nothing left."

He continued, "If our sales were even 50% of what the headquarters promoted, I would think it was my fault if only my store had low sales," but added, "However, many franchisees operating Yeondon Bolkatsu, including myself, are struggling with a sharp decline in sales."

The franchise owners commonly pointed to an extremely low revisit rate as a problem with Yeondon Bolkatsu. Customers who visited because of the names Baek Jong-won and Yeondon were not satisfied with the taste and did not return. The owner of the Yeondon Bolkatsu Gimpo Raveniche branch said, "Even the headquarters manager who trains Bolkatsu could not make proper Bolkatsu, so how could it be good when they started business after only two days of training?" and added, "With such insufficient training and menu, it is difficult to run the business."

There was also criticism that it took a long time for customer complaints to be reflected by the headquarters. This owner said, "We submitted requests such as Bolkatsu being too salty or taking too long to prepare, but it took a long time to be addressed, and ultimately disappointed customers did not return."

The franchise owners claimed, "The headquarters maximized its profits by rapidly opening many franchises based on sales generated by customers curious about Yeondon featured on the broadcast."

The Yeondon Bolkatsu Franchise Owners Association and the National Franchise Owners Association held a press conference on the afternoon of the 18th in front of The Born Korea headquarters in Gangnam-gu, Seoul, to announce cases of damages suffered by Yeondon Bolkatsu franchisees. / Photo by Im Onyu @ioy

"Yeondon and Baek Jong-won's Fame Led to Premature Franchising, Causing Problems"

At the press conference, franchise transaction specialist Jeong Jong-yeol pointed out that Yeondon Bolkatsu was franchised prematurely, relying on its fame without sufficient review.

Jeong said, "For a franchise to succeed, the intangible value of the products provided by the headquarters must be high," adding, "However, Yeondon Bolkatsu recruited franchisees and started the franchise business based on Yeondon's fame, which was problematic."

He continued, "To succeed as a franchise, a verification system must be in place, but 83 stores opened without such a process," and said, "The headquarters should not blame factors like COVID-19 or cost increases due to the Russia-Ukraine war for profitability decline but should work together to protect the franchisees, who are innocent victims, and solve the problems."

These franchise owners plan to file a postal complaint with the Fair Trade Commission as early as the 19th regarding Theborn Korea's false and exaggerated advertising and price fixing.

Baek Jong-won, CEO of The Born Korea

Theborn Korea: "No False or Exaggerated Advertising... Providing Sufficient Training"

In response, Theborn Korea issued an additional statement on the same day, refuting the claims made by Yeondon Bolkatsu franchise owners.

First, Theborn Korea denied inducing franchise contracts by inflating sales figures. A representative said, "When signing franchise contracts, we provided franchisees with specific information about expected sales through documents such as the 'Estimated Sales Statement,' and at no point did we promise false or exaggerated sales or profitability," adding, "The Estimated Sales Statement is a document individually provided to franchisees according to the Franchise Business Act and contains the most accurate and objective information related to expected sales disclosed by the headquarters."

Regarding claims that price increases were blocked despite worsening profitability, the representative explained, "We have sincerely consulted with franchisees to decide on sales prices, considering the uniformity of franchise operations," and added, "In October 2022, a price increase for delivery sales was implemented through such a process."

The claim that training on making Yeondon Bolkatsu was insufficient was also denied. Theborn Korea stated, "We have made great efforts to improve sales through continuous training for franchise stores," and added, "This includes pre-opening training, on-site training on the opening day, and regular training conducted by supervisors after opening."

Theborn Korea said, "False claims have caused disruptions to business," and declared, "We will actively take legal action against false, exaggerated, and sensational reports to protect our legitimate rights in the future."