The Born Korea, the franchise company led by celebrity chef Baek Jong-won, is restructuring its operations amid a falling share price and a shrinking domestic restaurant network. The company is expanding discount promotions for franchisees while pushing its budget coffee brand Paik's Coffee into Japan and Taiwan, building out a business-to-business sauce operation, and scaling up a regional development model as new growth engines.
The Born Korea's share price closed at 14,440 won ($11) on Thursday, according to securities industry data. That is less than half the 34,000 won IPO price at the time of its November 2024 listing, and more than 40 percent below its 52-week high of 26,600 won. Market capitalization has fallen to around 210 billion won.
Earnings deteriorated sharply last year. The Born Korea posted consolidated sales of 361.2 billion won in 2025, down 22.2 percent from the previous year. Operating profit of 25.6 billion won in 2024 swung to an operating loss of 23.7 billion won last year. The company said the results reflected about 43.5 billion won in mutual-growth subsidies it paid out to franchisees to help revive store performance.
Store count falls below 3,000; most major brands shrink except Paik's Coffee
The number of domestic restaurant brand outlets has also turned lower.
The Born Korea's total domestic restaurant store count slipped from 3,080 in 2024 to 3,068 last year. By the end of June this year it had fallen to 2,993, dropping below the 3,000 mark. A tally of brand-by-brand store counts listed on the company's website at the end of September showed the figure had declined further to around 2,930.
Individual restaurant brands also lost locations. Saemaul Sikdang fell from 68 stores at the end of last year to 59 at the end of the first half of this year. Hong Kong Banjum dropped from 277 to 264, and Paik Boy Pizza from 227 to 205.
Budget coffee brand Paik's Coffee bucked the trend. Its store count rose from 1,821 at the end of last year to 1,841 in the first half of this year. Even last year, when most of the company's restaurant brands were losing locations, Paik's Coffee added more than 100 stores. Analysts attribute the growth to sustained demand for low-cost coffee amid high inflation.
New brand launches have effectively stopped. The last new restaurant brand The Born Korea introduced was Hong Kong Bunsik, launched in 2023. The company said its priority is now improving the profitability and competitiveness of existing franchises rather than adding new brands.
Some signs of improvement have emerged in the financials. First-half sales this year came in at 162.8 billion won, down 11.9 percent from the same period a year earlier, but the operating loss narrowed to 9.8 billion won from 16.3 billion won, a reduction of 40.1 percent.
The second quarter was particularly notable: sales rose 12.2 percent year-on-year to 83.2 billion won, while the operating loss shrank roughly 75 percent to 5.6 billion won from 22.5 billion won. The improvement reflected a base effect from the heavy franchisee subsidies paid in the same quarter last year, as well as a recovery in normal operations.
Headquarters absorbs 3,000-won discount; franchisee support continues
Domestically, The Born Korea is continuing price discounts and franchisee support.
Its Yeondonttwigim Deopbap brand is running a promotion from Thursday through Saturday, offering 3,000 won off each of seven new dosirak menu items, with the full cost of the discount borne by headquarters.
The seven items eligible for the discount include Jeyuk Gadeuk Deopbap, Tong Deungsim Donkkaseu Jeyuk Jeongchan and Tong Chicken Jeyuk Jeongchan, among others. With the discount applied, some items start at 4,900 won. The Born Korea said the promotion is designed to drive customer traffic while shielding franchisees from the cost of the event.
Franchisee support costs weighed heavily on last year's results. The Born Korea disbursed about 43.5 billion won in mutual-growth subsidies in 2025, and the operating loss widened to 22.5 billion won in the second quarter of last year when support spending was most concentrated. The loss then narrowed to 4.4 billion won in the third quarter and 3 billion won in the fourth quarter.
The company plans to continue spending on sales promotion and brand restructuring this year. It is also working to broaden its business beyond its franchise-centered model to encompass ready-to-eat foods, sauces and overseas operations, positioning itself as a comprehensive food company.
Paik's Coffee heads to Japan and Taiwan; Yesan Market model goes national
Overseas, the company is accelerating its push into new markets with Paik's Coffee leading the way.
The Born Korea opened two company-operated Paik's Coffee stores in Tokyo — in the Shimbashi and Kanda districts — in August. The two locations each sold an average of more than 1,000 drinks per day on weekdays, the company said. It has also set up a "Paik's Coffee LAB" in Japan to handle menu development and staff training.
Last month, the company signed a 10-year master franchise agreement with a local partner in Taiwan. It aims to open the first store in the first half of next year, with a target of 10 locations in year one and a cumulative total of more than 150 by year five. In Canada, the company is pursuing a partnership with a local firm covering restaurant brands and sauce distribution, further expanding its B2B business.
At home, The Born Korea is extending its regional development model — which began at Yesan Market in South Chungcheong Province — to other parts of the country.
Yesan Market once drew only about 10 visitors a day, but after The Born Korea, Yesan-gun and local merchants joined forces, cumulative visitors surpassed 10 million in May this year. The company is now rolling out a business model combining locally sourced menu development, merchant training and the activation of idle spaces to Sangju and Mungyeong in North Gyeongsang Province, Gunsan in North Jeolla Province, Gangjin in South Jeolla Province, and Yeoju in Gyeonggi Province.
The regional development business remains more of a long-term investment than an immediate revenue generator. Baek has described the Yesan Market project as a process of demonstrating a replicable model before expanding it elsewhere.
The Born Korea is shifting its domestic focus from expanding its franchise footprint to improving the profitability of existing stores, while simultaneously broadening its scope into overseas food service, food and sauce distribution, and regional development. With losses narrowing in the second quarter of this year after a prolonged earnings slump, the key question is whether the new businesses can translate into a sustained recovery.
rainbow@heraldcorp.com
