Coffee shop owner in South Korea loses franchise after accusing worker of stealing 3 drinks

The operator of Paik's Coffee franchise in South Korea has terminated its agreement with a store owner in Cheongju, citing damage to the brand's public image through unlawful actions. The dispute centers on the owner's accusation that a part-time, high school senior worker embezzled three drinks. The company stated that the entire franchise faced criticism following the incident. The termination was based on a government investigation that uncovered violations of the Labour Standards Act by the store owner. The probe also revealed that the teenage worker experienced workplace bullying and was denied wages. In December 2025, the owner demanded compensation from the student for the alleged theft. Despite the student's family paying 5.5 million won (approximately S$4,600) to avoid litigation, the owner refused to formalize the settlement. The student maintained her innocence, fearing the legal dispute could jeopardize her college prospects. Her father noted that two of the drinks in question were about to be discarded. Both parties filed criminal complaints, with the worker accusing the owner of extortion and intimidation, and the owner accusing the worker of embezzlement. The Ministry of Employment and Labour launched an investigation in April after a workplace bullying complaint was filed in March. The owner dropped the embezzlement complaint and returned the money shortly after the investigation began. A recorded phone conversation revealed the owner threatening the student, stating, "You won't go to college with a criminal record," and "I'll make sure you never get a job around here." The ministry concluded its investigation on June 8, finding the owner operated the store illegally and had unlawful labor contracts. The owner was also fined for workplace bullying and failing to pay wages to 49 workers, including the teenager. The government has filed a criminal complaint, and the owner is currently under investigation.

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The entire Paik’s Coffee franchise has been subject to criticism since the Cheongju incident.