Yeondon Bolkatsu Store Owners Report Baek Jong-won's The Born Korea to the Fair Trade Commission

The Born Responds, "Franchise Owners Demand Monetary Compensation"

Yeondon Bolkatsu franchise owners have reported The Born Korea, a food service company led by CEO Baek Jong-won, to the Fair Trade Commission for alleged violations of the Franchise Business Act and other laws.

The Yeondon Bolkatsu Franchise Owners Association and the National Franchise Owners Association announced on the afternoon of the 24th that they submitted a report to the Fair Trade Commission accusing The Born Korea of violating the Franchise Business Act and the Fair Trade Act. The report alleges that The Born Korea headquarters promoted the franchise by mentioning specific expected sales and profit figures to prospective franchisees and infringed on the franchisees' rights to set menu prices.

Representatives of 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.
[Image source=Yonhap News]

The franchise owners claim that the headquarters promised a certain level of sales and profitability. They held a rally in front of The Born Korea headquarters in Gangnam-gu, Seoul, on the 18th, stating, "The headquarters guaranteed monthly sales of around 30 million KRW and a profit margin of 20-25%, but actual sales were only 15 million KRW, half of the promised amount, and the profit margin was about 7-8%." They also emphasized that The Born Korea did not agree to any price increases.

On the other hand, The Born Korea denied ever promising specific sales or profit margins. They also released a recording, claiming that some franchise owners demanded financial compensation during a meeting with The Born Korea executives on July 5 of last year.

The recording includes a franchise owner saying, "Whether it's 50 million KRW or 60 million KRW, if there is such a point of agreement, we will end the negotiations for financial compensation; if you give 100 million KRW, we will stay quiet; and if it's 150 million KRW, we will disband the franchise owners' association."