Mr. Pizza chairman resigns amid scandal

Mr. Pizza founder Jung Woo-hyun bows in apology over allegations of his mistreating franchisees at the firm’s head office in Seoul, Monday. He said that he will resign as chairman. / Yonhap

By Park Jae-hyuk

Mr. Pizza founder Jung Woo-hyun, who has faced investigation over allegations of mistreating franchisees in various ways, announced his resignation as MP Group chairman, Monday.

“CEO Choi Byung-min will be in charge of the company’s management,” he said in a press conference at the group’s headquarters in Seoul, apologizing for the recent controversies that the pizza firm has faced.

The prosecutors recently raided the group’s head office and imposed a travel ban on the chairman for allegations of overcharging cheese prices to franchisees and punitive actions against those who canceled their franchise deals with the group.

According to the prosecutors, MP Group opened new stores near the stores of previous franchisees in Icheon and near Dongincheon Station, selling pizza for much cheaper than the original prices. The company is also suspected of having pressed ingredient manufacturers not to supply cheese and sauce to the previous franchisees.

After one of the franchisees committed suicide in March after being sued by the headquarters, Mr. Pizza has faced public resentment.

In addition, MP Group has allegedly forced its franchisees to buy cheese for higher prices from a company owned by the 69-year-old chairman’s younger brother.

The prosecutors’ office is also reportedly probing the group’s charges of creating a slush fund, imposing on franchisees advertising expenses and forcing them to buy the chairman’s autobiography.

“I’ll shut down the controversial Icheon and Dongincheon Station branches, and exclude my relatives from the business,” Jung said. “We will establish a committee consisting of experts, consumers and franchisees to come up with reform plans.”

Both Jung and Choi, however, declined to comment on the prosecutors’ probe.

Last year, Jung was indicted for assaulting a night watchman at a building in Seodaemun, where MP Group had opened a new restaurant. He raised the ire of the public at that time.

The Mr. Pizza case has also drawn public attention, as it is the Seoul Central District Prosecutors’ Office’s first investigation under Yoon Seok-yeol.

Yoon was appointed to lead the prosecutors’ office by President Moon Jae-in, so he is expected to protect the rights of marginalized franchisees in line with the administration’s economic stance.