Analysis of Franchise Sales by Cha Kyugeun of the National Innovation Party
"Urgent Need for Headquarters-Level Measures to Prevent Recurrence"
It has been found that the sales of Hongkong Banjeom and Saemaeul Sikdang, flagship brands of Theborn Korea, a dining franchise led by CEO Baek Jongwon, have dropped by nearly 20% over the past two months.
According to data submitted by National Assembly member Cha Kyugeun of the National Innovation Party on the 24th, which was compiled from sales data of four credit card companies (Samsung, Shinhan, Hyundai, and KB) provided by the Financial Supervisory Service, the major brands of Theborn Korea have shown a marked decline in sales since February.
A survey revealed that the sales of the flagship brands of Theborn Korea, a dining franchise led by CEO Baek Jongwon, have sharply declined. Yonhap News
Hongkong Banjeom's average daily sales fell by 18.5%, from 74,530,000 won in February to 60,720,000 won in April. Saemaeul Sikdang also saw a 17.6% decrease over the same period, from 99,450,000 won to 81,900,000 won.
The industry believes that the controversies surrounding CEO Baek have led to a decline in customer trust. Since February, a series of issues have emerged, including the Baekham price controversy, false labeling of tangerine beer content, violations of ingredient country-of-origin labeling, alleged violations of the Farmland Act, insufficient management of liquefied petroleum gas (LPG) safety, and sexual harassment interview scandals. It is currently reported that 14 investigations are underway solely for alleged violations of the Food Labeling and Advertising Act and the Food Sanitation Act.
The coffee brand "Paikdabang," which is part of the same group, saw its average daily sales increase by 11.8% in March compared to the previous month, reaching 438,760,000 won. However, the growth rate dropped sharply to 1.9% in April, indicating that it was not immune to the effects of the spreading controversies.
Cha Kyugeun pointed out, "In the franchise business structure, the risks associated with the founder result in even greater damage to franchisees," and emphasized, "Theborn Korea and CEO Baek Jongwon must take responsibility for the damages suffered by franchisees and present effective measures to prevent recurrence."
Not only franchisees but also individual investors holding shares of Theborn Korea have suffered significant losses. According to Naver Pay's "My Assets Service," the average purchase price for 5,846 investors was calculated at 37,513 won, and based on the current share price of 27,100 won, the average loss rate amounts to 27.76%.
According to NH Investment & Securities, among the 16,640 people holding Theborn Korea shares, 99.5% are experiencing losses, with an average loss rate of 25.38%. This means that more than a quarter of the invested capital has evaporated.
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