Table of Contents
- What is the truth behind the MyungRyunJinsaGalbi lending controversy?
- The connection between MyungRyunJinsaGalbi and the lending business
- The center of the complex governance structure and funding flow, MyungRyunDang
- The burden on franchise owners, controversy over high-interest loans and legal issues
- The MyungRyunJinsaGalbi controversy, remaining tasks and consumer rights
What is the truth behind the MyungRyunJinsaGalbi lending controversy?
Recently, the company MyungRyunDang, known as a national galbi brand operating MyungRyunJinsaGalbi, has come under suspicion of providing high-interest loans to franchise owners, emerging as a social issue.
This incident has expanded beyond simple franchise operations to financial controversy, raising serious concerns among prospective entrepreneurs, existing franchise owners, and consumers.
This article seeks to clarify the reality of this controversy by delving into its main elements, the entangled governance structure, and the relationships among the related companies.
The connection between MyungRyunJinsaGalbi and the lending business
At the center of the controversy is the fact that MyungRyunDang and its affiliates are lending startup funds to prospective franchise owners at high-interest rates, thereby generating interest revenues and expanding their franchise business. Evidence has emerged that the co-representatives and major shareholders of MyungRyunDang, along with their families, are deeply involved in the operations and funding flows of the lending companies.
In particular, the company Penple appears to play a crucial role in this incident. Although Penple claims to be engaged in the wholesale and retail of meat, it has been alleged that it actually serves as a financial intermediary that receives funds from MyungRyunDang and passes them on to lending companies. This situation raises many questions, and it remains to be seen how this incident will unfold in the future.
MyungRyunDang secures funds from financial institutions at relatively low interest rates and then lends them to related lending companies through Penple or directly. These lending companies subsequently offer loans to prospective franchise owners at high-interest rates in the mid-teens annually.
This operational model is unlikely to escape criticism of being a "usury business," exploiting the difficulties of franchise owners for profit. This can further exacerbate the financial burdens of the franchise owners.
The center of the complex governance structure and funding flow, MyungRyunDang
Analyzing MyungRyunDang's governance structure and funding flow reveals a clearer picture of the controversy. In addition to its flagship brand MyungRyunJinsaGalbi, the company operates various restaurant brands, notably the Shabu-shabu buffet 'ShabuOlDay' and the craft beer brand 'Italian Brewery'.
The ShabuOlDay business is conducted through AllDayFresh Inc. and MyungRyunDang Partners, which prominently include key figures from MyungRyunDang's leadership. This structure raises questions about the transparency of funding flows and operations.
The wife of Lee, a major shareholder and co-representative of MyungRyunDang, is also known to play a significant role in several companies. She not only holds shares in MyungRyunDang but also serves as an executive director of AllDayFresh Inc., the corporation operating ShabuOlDay. Furthermore, she is the representative of JS Angel Networks Lending, a lending company, making her a key figure linking these three businesses.
Moreover, Penple is reported to be a family-owned company with approximately 90% of its shares held by Lee and his wife. Allegations have arisen suggesting that funds flow into Penple and various lending companies through MyungRyunDang, raising concerns about this relationship.
Ultimately, claims have been made that a small number of core insiders are deeply involved in this structure, reaping profits at the expense of others. This situation raises concerns about corporate transparency and fairness, indicating a need for further investigation.
The burden on franchise owners, controversy over high-interest loans and legal issues
The recent incidents in the franchise industry have imposed serious financial burdens on franchise owners and raised allegations of unfair trade. The Songpa District Office in Seoul has sent prior administrative disposition notifications regarding 10 lending companies associated with MyungRyunDang for violations of the Lending Business Act. These companies are suspected of neglecting the borrower's repayment ability and violating the excessive lending prohibition.
Additionally, MyungRyunDang and Penple are under police investigation for operating unregistered lending businesses. These legal actions are further amplifying anxieties among franchise owners.
Currently, franchise owners have filed charges against Do and Lee, co-representatives of MyungRyunDang, citing violations of the Special Act on Economic Crimes and occupational embezzlement. They argue that the high returns promised by headquarters during the COVID-19 pandemic induced them to invest, which they claim constitutes a similarity to unauthorized solicitation, and they view the unsecured loans to Penple as occupational embezzlement.
This incident is shedding light on the negative aspects of the franchise industry, and attention is keenly focused on how the investigation will unfold. There is a pressing need for efforts to protect the rights of franchise owners and create a fair trading environment.
The MyungRyunJinsaGalbi controversy, remaining tasks and consumer rights
In conclusion, the lending issues associated with MyungRyunJinsaGalbi appear to stem from a complex governance structure and funding methods. This situation imposes excessive financial burdens on franchise owners and raises ethical and legal concerns for the company.
This incident raises awareness of the behavior of franchise headquarters abusing their superior position to impose unfavorable contracts on franchise owners or seeking profits through abnormal means.
For the franchise industry to develop healthily and to protect the rights of franchise owners and consumers, corporate management transparency and adherence to ethical responsibilities are essential. Additionally, thorough investigations by relevant authorities and institutional improvements are needed to prevent similar incidents from recurring.
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