Theborn Korea embroiled in theft scandal at Paik's Coffee

A Paik's Coffee location near Euljiro 1-ga Station in Seoul / Newsis

Major food and beverage franchise company Theborn Korea is under dual investigation by the government and police after its signature low-budget coffee brand Paik’s Coffee became embroiled in a dispute between franchisees and a part-time worker over allegedly stolen drinks.

Theborn Korea CEO Paik Jong-won

The Ministry of Employment and Labor dispatched officials from its Labor Inspection Planning Division to two Paik’s Coffee stores in Cheongju, North Chungcheong Province, where the employer-employee dispute occurred. The Cheongju Cheongwon Police Station is also investigating the case.

Each franchisee accused a part-time worker in her 20s of giving beverages to friends and acquaintances or taking drinks herself without informing her employers.

One franchisee claimed the worker took 112 drinks without permission while employed from May to October last year. Another franchisee, who had hired her before May, said she improperly accumulated store credit stamps worth 350,000 won ($232) by violating company regulations.

The worker said she took only three iced Americanos without paying when she quit one of the stores.

She appears to have paid 5.5 million won in restitution to one franchisee. However, she claims the payment was made because she was coerced, alleging the employer threatened to impede her postsecondary education plans if she refused to pay. The franchisee, however, said she voluntarily agreed to compensate for business losses and emotional distress, citing security footage and a handwritten apology letter as evidence.

The worker later filed a complaint with police over alleged blackmail, and the employer countersued for occupational embezzlement. As the issue drew widespread public attention, the employer eventually withdrew the lawsuit.

Authorities are examining the case from different angles. The ministry is investigating potential labor violations, such as unpaid wages and workplace bullying, while police are determining whether the unpaid beverages constitute occupational embezzlement. The case has been forwarded to the Cheongju District Prosecutors’ Office without detention.

Following the ministry’s on-site inspection, Theborn Korea said Monday that it considers the incident a “grave matter” and has sent executives and legal experts to verify the facts.

“Our franchisees and employees are equally valuable to us. We will thoroughly examine the details of the case, conduct our own investigation and take strong measures at the headquarters level depending on the outcome of judicial proceedings,” the company said.

Theborn Korea, led by celebrity restaurateur and franchise businessman Paik Jong-won, added it will strengthen workplace education for franchisees — currently held twice a year — to better prevent disputes between employers and employees.