Delayed return of member contributions, wage and severance payment disruptions

Franchise closures mount as bottled water supply halted

Jayon Dream, the eco-friendly and organic food retail brand of iCOOP Consumer Cooperative, has been beset by delays in returning member contributions. Pictured is an Earth Day event held at Jayon Dream last year. [Newsis]
Jayon Dream, the eco-friendly and organic food retail brand of iCOOP Consumer Cooperative, has been beset by delays in returning member contributions. Pictured is an Earth Day event held at Jayon Dream last year. [Newsis]

"I applied to reduce my contribution and was told I would receive 260,000 won of the 1.26 million won ($938) back in October next year," said one Jayon Dream cooperative member.

Troubles continue to mount around Jayon Dream, the eco-friendly and organic food retail brand of iCOOP Consumer Cooperative. Members who have applied to withdraw from the cooperative or reduce their contributions say they have not been receiving their money back on time. Wage and severance payments to employees have also hit snags. A key affiliate has filed for court receivership.

Jayon Dream Salt Road, a specially related company of Jayon Dream, filed for rehabilitation proceedings at Seoul Bankruptcy Court on Wednesday. Salt Road produces Gipeunmul, a bottled water brand supplied monthly to Jayon Dream members. The supply of that water to members has already been suspended.

Member frustration is growing. A member in their 60s surnamed Kim, who joined Jayon Dream four years ago, said they had not received Gipeunmul since September. "After the supply was cut off, we were told we could get discount vouchers for accommodations as an alternative benefit — it was a jarring surprise," Kim said.

Members unsettled by the cooperative's troubles have been leaving in growing numbers. The central issue is the return of contributions and loans. Contributions are funds members pay to their cooperative and are refunded upon withdrawal according to the cooperative's articles and rules. Loans are separate funds that members lend directly to affiliated entities responsible for product supply, distribution and financial management.

iCOOP Consumer Cooperative had encouraged members to participate in lending by offering annual interest rates of 6 percent over two-year terms — higher than commercial bank rates — while some offered rates of 14 to 18 percent. Although the two types of funds differ in nature and repayment terms, anxiety is rising as both have been slow to return. Members have formed an emergency committee.

Wage payments to employees have also been irregular. Jayon Dream pays salaries on the 10th of each month. One employee said the company called to warn that salary payments could be delayed. Severance payments have reportedly also run into difficulties. Under the Labor Standards Act, employers must pay wages, severance and other monetary entitlements within 14 days of an employee's departure, barring exceptional circumstances.

According to materials iCOOP Consumer Cooperative released at a member public hearing in September, total borrowings across 73 affiliated entities stood at 373 billion won. Of that, 146.9 billion won came from member loans and 226.1 billion won from bank borrowings. Some 2,375 members participated in a total of 9,130 lending transactions.

The outlook for raising funds through operations is bleak. The number of Jayon Dream franchise stores has been falling steadily — from 249 in 2022 to 242 in 2023 and 229 in 2024, and most recently down to 145. The Gongdeok-Ahyeon branch also closed Oct. 30.

Jayon Dream's own finances are equally strained. As of end-2025, the company held approximately 350 million won in cash and cash equivalents, while current liabilities stood at about 57.59 billion won — exceeding current assets of roughly 31.89 billion won by approximately 25.7 billion won.

Hwang Yong-sik, a professor of business administration at Sejong University, said that even a cooperative business model requires professional management capabilities to remain sustainable. "A structure that relies heavily on member contributions and loans can be a financial risk factor, and investors should exercise caution," Hwang said.


siuu@heraldcorp.com