SEOUL: A coffee franchise operator in South Korea has terminated its franchise agreement with one of its stores, saying the owner damaged the brand’s public image through unlawful acts, including accusing a part-time worker of embezzlement over three drinks.
Theborn Korea, operator of Paik’s Coffee, recently notified the store in Cheongju, North Chungcheong Province, of the termination, according to Money Today.
“The entire Paik’s Coffee franchise has been subject to criticism since the Cheongju incident,” a company official was quoted as saying.
The company cited a government investigation that found Labour Standards Act violations by the store owner as the basis for terminating the contract.
The probe also found that the part-time worker, a high school senior at the time, had been subjected to workplace bullying and unpaid wages.
Labour probe finds unpaid wages, workplace bullying
In December 2025, the owner told the teenage worker that she had to pay compensation for allegedly stealing while working at the coffee shop. The student sought to avoid litigation, and her family paid 5.5 million won (S$4,600), but the owner refused to document the settlement.
The student said she knew the allegations were false, but feared the legal dispute could affect her college admissions. Her father said two of the three drinks she was accused of “stealing” were about to be thrown out.
The case led both sides to file criminal complaints against each other. The worker accused the owner of extortion and intimidation, while the owner accused her of embezzlement.
A workplace bullying complaint was filed with the Ministry of Employment and Labour in March, and officials launched an investigation on April 1.
The owner dropped the complaint against the worker the day after the ministry began its probe and returned the money to her a few days later.
A recording of a phone conversation between the two showed the owner threatening her before receiving the money, saying, “You won’t go to college with a criminal record”, and “I’ll make sure you never get a job around here”.
On June 8, the ministry concluded that the store owner had illegally operated the store and signed unlawful labour contracts with workers.
It also imposed an administrative fine on the owner for workplace bullying against the teenage worker and for failing to pay a portion of the wages owed to 49 workers, including the teenager.
The government filed a criminal complaint against the owner, who is currently under investigation without detention. - The Korea Herald/ANN
