Fatal stabbing at Seoul pizza shop exposes strains in franchise industry

Police investigate the scene of a stabbing at a pizza restaurant in Gwanak District, Seoul, Wednesday. Yonhap

Three people were fatally stabbed at a pizza restaurant in southwestern Seoul on Wednesday, after a dispute between the franchise’s headquarters and the shop owner over menu changes and renovation costs turned violent.

The episode underscores the mounting strain on Korea’s small business owners, who operate under a franchise system often criticized for imposing heavy costs while offering little support. In a country with a rapidly aging population, many retirees with limited job prospects turn to running small shops and franchise outlets, making their struggles a barometer of widening inequality and a source of social tension.

According to Statistics Korea, self-employed and unpaid family workers accounted for 22.9 percent of Korea’s workforce last year — the seventh-highest share among members of the OECD. As of 2023, the country had some 301,000 franchise outlets, employing more than 1 million people.

The widespread presence of small-business ventures, however, can create profound social and economic pressures — a reality that surfaced tragically in Seoul earlier this week.

Police said four people were found stabbed at a franchise pizza restaurant in Gwanak District, a neighborhood in southwestern Seoul home to many working-class residents. The suspect, a 41-year-old man who ran the shop, allegedly killed three people before turning the knife on himself.

All of the victims, who suffered severe abdominal wounds, were rushed to a nearby hospital but succumbed to their injuries. The suspect also sustained life-threatening injuries.

Police investigate the scene of a stabbing at a pizza restaurant in Gwanak District, Seoul, Wednesday. Yonhap

The victims included a male executive from the franchise headquarters of Pizza Innovation, and a father and daughter who worked as interior contractors. The suspect had reportedly been in conflict with the company over a planned store renovation.

“The company-designated contractor renovated the shop less than two years ago, but it already had leaks and broken tiles that the headquarters refused to pay to fix,” the suspect’s mother was quoted as saying in a Korean media report.

“They made him sell a single serving combo meal that was clearly unprofitable. When he refused, the company retaliated through the renovation process,” she said.

She added that her son believed the franchise held a grudge against him and had arranged a meeting with company officials and interior contractors — one that took place on the day of the stabbings.

Disputes between franchise headquarters and shop owners have been increasing in Korea in recent years, often over the cost of supplies. Franchisors typically provide essential ingredients and materials to their franchisees, generating profit by adding a markup.

A growing number of franchisees are pushing back, alleging that headquarters inflate profits by imposing excessive markups. According to the Korea Franchise Association, 2,491 franchisees from 17 major brands were involved in lawsuits over such fees between October 2024 and last month.

The surge in legal disputes follows a Seoul High Court ruling last September that ordered Pizza Hut Korea to return 21 billion won ($15.08 million) in excess royalties in a lawsuit filed by 94 franchisees over payments made between 2016 and 2022.

According to the Fair Trade Commission, the average markup royalty paid by a franchisee to headquarters amounted to 23 million won in 2023, accounting for 4.2 percent of the franchisee’s annual sales.

The Fair Trade Commission said Thursday it is closely monitoring the investigation into the incident.

“If the police investigation confirms the facts surrounding the crime and we determine that there was a violation of the Franchise Business Act, we will take appropriate action,” it said.

The pizza franchise denied exerting undue pressure on the franchisee.

“Since launching our franchise operations in October 2021, we have never forced any franchisee to renovate,” Pizza Innovation said in a statement Wednesday. “This incident stemmed from a dispute between the suspect and the interior contractor over whether the repairs should be free of charge.”

The company said tensions escalated recently when the suspect demanded the contractor fix cracked tiles. The contractor responded that nearly two years had passed since the store opened and the warranty had expired, meaning the repairs would not be covered.

Meanwhile, the suspect reportedly admitted to the crime while being transported to the hospital. Police said they plan to arrest him once he is cleared for discharge.