Some franchisees of Yeondon Bolkatsu, a brand under Theborn Korea led by CEO Baek Jong-won, have announced their intention to report the headquarters to the Fair Trade Commission, amid which a recording revealing that they demanded financial compensation from the company before filing the report has been disclosed.
According to reports from YTN and others on the 19th, during a meeting held last July between seven Yeondon Bolkatsu franchisees who raised concerns about discrepancies between projected and actual sales and Theborn Korea headquarters, some franchisees mentioned financial compensation. This fact came to light when Theborn Korea released a recording of part of the conversation from that meeting.
In the recording, franchisee A said, "For example, if there is a settlement point of 50 million won or 60 million won, we would end it, and if they pay that, I would spread the word that we received money. If they pay 100 million won, I would stay quiet, and if it’s 150 million won, I would disband the council."
He added, "The reason I am saying this is because the council gathered here is going to the National Franchisee Council, and since they want compensation during this preparation process, we need to consider that part."
Franchisee A also introduced himself as having experience operating multiple franchise brand stores besides Yeondon Bolkatsu and reportedly stated that he had previously received financial compensation from various brands.
A representative from Theborn Korea who attended the meeting told YTN, "It was a meeting to discuss ways to revitalize the business together, but they showed no interest and only talked about financial compensation." He continued, "From the company’s perspective, if financial support is provided, it should be for all stores, not just specific locations, but they demanded compensation only for themselves and said they would be quiet once the negotiation ended."
Theborn Korea also stated that before the franchisees reported to the Fair Trade Commission, the company voluntarily requested a review on April 29. A representative explained, "We legally reviewed some of the demands raised by certain franchisees and found them unjustified. Nevertheless, since they continued to claim illegality and were about to report to the Fair Trade Commission, the company voluntarily requested a review first."
The representative added, "False claims are causing serious disruption to the company’s operations. If these false claims continue, we plan to take additional legal action to protect our rightful interests, including defamation lawsuits."
On the afternoon of the 18th, representatives from the Yeondon Bolkatsu Franchise Owners Association and the National Franchise Owners Association held a press conference in front of The Born Korea headquarters in Gangnam-gu, Seoul, to announce cases of damages suffered by Yeondon Bolkatsu franchisees. [Image source=Yonhap News]
Earlier, on the 18th, seven Yeondon Bolkatsu franchisees held a press conference in front of Theborn Korea headquarters in Gangnam-gu, Seoul, stating, "We plan to submit a report to the Fair Trade Commission within this week." They alleged that Theborn Korea exaggerated projected sales when recruiting franchisees and was passive in preparing follow-up measures despite worsening profits.
In response, Theborn Korea denied their claims as untrue. The company asserted that it has made efforts to coexist with franchisees, rebutting the allegations with supporting evidence, and stated that it would not hesitate to take legal action based on objective facts regarding any inaccuracies.
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