Once an 80-Billion-Won "Open-Run Hotspot"... London Bagel Museum Plunges Amid Mounting Crises [Why&Next]

800 Billion-Won Success Story Rocked by Employee Death and Labor Controversy
Criticism Mounts as Founder Remains Silent

London Bagel Museum, known as the "open-run hotspot" that sparked the domestic bagel craze, is now facing its greatest crisis. Having surpassed 80 billion won in annual sales just four years after its founding and being hailed as a "premium bakery success story," the company is now under scrutiny as organizational fatigue and management failures, which accumulated during its rapid growth, have come to light following a recent employee death.

According to industry sources on November 7, the Ministry of Employment and Labor has recently expanded its supervision to include all London Bagel Museum locations as well as all 18 business sites operated by its parent company, LBM. Since October 29, the ministry has been investigating the headquarters and the Incheon branch of London Bagel Museum for compliance with the 52-hour workweek, the legality of employment contracts, and wage arrears. It was reported that the scope of supervision was broadened after employee surveys and interviews conducted during the inspection revealed evidence of legal violations.

On the 3rd, in front of the London Bagel Museum Anguk Branch in Jongno-gu, Seoul, members of the Green Party shouted slogans during a political speech event related to the death of a London Bagel Museum worker. Photo by Yonhap News

Worker Dies After 80-Hour Workweek... Ongoing Labor Exploitation Controversy

This incident began when it was revealed that on July 16, a worker surnamed Jeong (aged 26) was found dead at the London Bagel Museum dormitory in Michuhol-gu, Incheon. The bereaved family claimed that Jeong had endured an extremely long workweek of 80 hours and 12 minutes during the week prior to his death. Additionally, in the 12 weeks leading up to his death, he reportedly worked an average of 60 hours and 21 minutes per week. This falls under the categories of acute, short-term, and long-term overwork as defined by the Korea Workers' Compensation & Welfare Service.

According to the guidelines of the Korea Workers' Compensation & Welfare Service, a death is considered to be caused by acute, short-term, or long-term overwork if the average weekly working hours in the week before death exceed 64 hours; if the workload and hours in the week immediately preceding death increase by more than 30% compared to the average of the previous 12 weeks; or if the average weekly working hours over 12 weeks exceed 60 hours.

London Bagel Museum stated that legal disputes with the bereaved family have been resolved through a settlement, but the controversy continues. Internally, there have been ongoing revelations about unpaid severance pay, split contracts, and missing overtime allowances. There have even been claims that work records disappeared due to malfunctioning fingerprint scanners, highlighting the structural fatigue that has built up within the organization and come to the surface through this incident.

The retail industry has also begun to respond to the controversy. Kurly recently suspended all sales of London Bagel Museum products on its online mall. Kurly was the first platform to introduce London Bagel Museum products online last year. Currently, searching for "London Bagel Museum" on the Kurly website only displays a message stating "Products coming soon." The industry is watching closely as Kurly's action could potentially lead to a wider boycott. London Bagel Museum also has stores in major offline retail channels such as Lotte Department Store, The Hyundai Seoul, and Shinsegae Starfield.

London Bagel Museum. The Asia Business Daily DB

'The Paradox of Scarcity Marketing'... Overload Caused by Surging Demand

London Bagel Museum opened its first store in Anguk-dong, Jongno-gu, Seoul in 2021, creating a sensation in the food service industry. With overseas travel halted during the COVID-19 pandemic, its exotic interior and diverse bagel menu appealed to a sense of "overseas atmosphere," and the brand gained explosive popularity through word-of-mouth on social media. On weekends, hundreds of people would line up, and it became established as an "open-run destination." It was also selected as the "number one store in waiting list" for two consecutive years on the reservation app Catch Table.

Buoyed by its popularity, the company’s performance grew rapidly. LBM, the operator, recorded 79.6 billion won in sales and 24.3 billion won in operating profit last year. Sales increased by 120% compared to the previous year, and the operating margin reached 30.5%, surpassing Sungsimdang’s 25%. Despite an overall slump in the food service industry, London Bagel Museum achieved unrivaled profitability and was regarded as the "most successful bakery."

In particular, the strategy of offering "bread that is not easy to buy" increased consumer loyalty. London Bagel Museum maintained its scarcity by rejecting store opening proposals from large corporations such as Shinsegae and Hyundai Department Store and operating only seven standalone stores nationwide.

However, this growth trajectory is believed to have resulted in excessive workloads for internal staff. According to the office of Assemblyman Lee Hakyoung of the Democratic Party of Korea, the number of industrial accident approvals for London Bagel Museum surged from one in 2022 to 12 in 2023, 29 in 2024, and 21 as of September 2025. This means there have been a cumulative total of 63 industrial accidents in just four years since opening.

Structural Risks Created by SNS-Driven Emotional Consumption

This situation also exposes the structural limitations faced by the food service industry as a whole. Recently, food service brands are consumed more for their "image" than for their "products." Consumers purchase not only the taste or quality of food but also the experiences and emotional narratives offered by the brand. Especially for brands like London Bagel Museum, which grew through social media, every aspect-store interior, waiting lines, packaging, and reservation systems-becomes content.

An industry insider commented, "London Bagel Museum customers are not simply buying taste; they are consuming the feeling of 'being part of this brand,'" adding, "In order for a brand to be sustained, it must provide the same 'experience' every day, but since it is ultimately people who create that experience, if issues such as working conditions or ethics damage the brand’s image, loyal customers can quickly leave."

This is also why the silence of founder Lee Hyojeong (Ryo), who led the branding, has amplified London Bagel Museum’s crisis. Despite being the key figure behind the brand’s "emotional appeal" and "worldview," Lee has not made any official statement since the employee death incident emerged. The timing of the death coincided with the company’s sale process, leading to growing criticism that Lee was "evading responsibility." In July, Lee sold the company to private equity fund operator JKL Partners for about 200 billion won.

An expert familiar with the franchise industry noted, "London Bagel Museum’s crisis will be recorded not simply as a labor issue but as a case of 'brand management failure,'" adding, "Short-term performance gains can lead to long-term crises."