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Baek Jong-won, CEO of Theborn Korea. (Photo=Yonhap News) |
[Alpha Biz= Reporter Kim Jisun] The Born Korea, operated by CEO Baek Jong-won, has announced its intention to fully cooperate with the Fair Trade Commission's (FTC) investigation.
The FTC is currently investigating whether The Born Korea has violated franchise laws.
On the 24th, Baek Kwang-hyun, a lawyer from Barun Law LLC representing The Born Korea, stated, "We submitted the requested documents to the FTC yesterday (the 23rd) to clarify our position. We will respond to any additional requests for documents."
According to the restaurant franchise industry, the FTC is investigating The Born Korea and its franchise, Yeondong Pork Cutlet, regarding allegations of conflicts between the head office and franchisees.
Previously, the National Franchisee Association and Yeondong Pork Cutlet franchisees accused the head office of recruiting franchisees with false and exaggerated advertising and ignoring declining sales.
On the 18th of last month, the Yeondong Pork Cutlet National Franchisee Association held a press conference in front of the franchise headquarters in Gangnam, Seoul.
They claimed that within less than three years of starting the franchise business, over 50 out of 83 new franchise locations had closed, and the head office was disregarding the declining profitability due to price controls.
Specifically, franchisees alleged that when recruiting franchisees in early 2022, the head office advertised daily sales of 3.38 million to 4.68 million KRW on the Yeondong Pork Cutlet promotional website.
Based on this information, they believed it was a profitable brand, but sales began to drop rapidly after the first month of opening.
In response, CEO Baek Jong-won expressed his frustration on his YouTube channel.
He explained, "The situation started with collective action by eight Yeondong Pork Cutlet franchisees in June. Misinformation has been amplified and reproduced, leading to criticism of The Born Korea."
He emphasized, "This issue affects the livelihood of over 2,900 franchisees. While small business owners are crucial, companies that work diligently with good intentions should not be harmed."
Alphabiz Reporter Kim Jisun(stockmk2020@alphabiz.co.kr)
