Baek Jongwon's 3,900 Won Jjajangmyeon Gamble... Will the Image Recovery Attempt Succeed?

Taking Action to Share Franchisee Burdens
Attempting to Overcome Crisis Through Discounts

The dining franchise company Theborn Korea, led by CEO Baek Jongwon, has launched a bold attempt to restore its declining brand image through a sensational discount event offering a bowl of Jjajangmyeon for 3,900 won.

The dining franchise company Theborn Korea, led by CEO Baek Jongwon, is attempting to restore its declining brand image through a sensational discount event.

On June 7, Theborn Korea announced that its Chinese cuisine brand Hongkong Banjum 0410 will run a "National Support Campaign" for two days, on June 10 and 11. The company explained, "Anyone visiting Hongkong Banjum locations nationwide, except for a few excluded stores, can enjoy Jjajangmyeon for 3,900 won." The same benefit applies to takeout orders at stores specializing in takeout and delivery that do not offer dine-in service.

Separately, Theborn Korea is also running a "Patriotic Veterans Appreciation Event" for uniformed personnel who dedicate themselves to national security and public safety. Until June 8, military personnel, police officers, firefighters, and correctional officers who visit the store in uniform or present their ID can receive Jjajangmyeon for 3,900 won.

This campaign is a form of "pain sharing" measure intended to support franchise owners who are struggling due to various recent controversies surrounding CEO Baek and Theborn Korea. The headquarters plans to designate discounted brands by day of the week and offer up to 50% off on signature menu items until the end of this month. However, some point out that such measures are insufficient to alleviate the tangible losses felt by franchise owners operating more than 3,000 locations nationwide.

The dining franchise company Theborn Korea, led by CEO Baek Jongwon, is attempting to restore its declining brand image through a drastic discount event. Theborn Korea

Theborn Korea has recently faced a series of owner-related risks over the past few months, including the "Baekham price controversy," false labeling of beer content, failure to indicate country of origin, alleged violations of the Farmland Act, inadequate safety management, and abuse of power. In particular, its coffee brand Paikdabang, which operates about 1,800 stores nationwide, is reportedly considering removing CEO Baek as its advertising model for the first time in 17 years since its launch.

Theborn Korea's deteriorating performance has also directly impacted its stock price. After hitting a high of 64,500 won on its first day of listing on November 6, 2023, the stock price has been on a continuous decline. Currently, the stock price is more than 20% below the offering price of 34,000 won and has not recovered to the offering price even once this year.

Franchisees are also experiencing a clear decline in sales. According to credit card sales data from Samsung, Shinhan, Hyundai, and KB, submitted to National Innovation Party lawmaker Cha Kyugeun by the Financial Supervisory Service, Theborn Korea's major brands have all seen a decline in sales since February. The average daily sales of Hongkong Banjum dropped by 18.5%, from 74.53 million won in February to 60.72 million won in April. Saemaeul Sikdang also saw sales decrease by 17.6%, from 99.45 million won to 81.90 million won during the same period.