Food tycoon Paik Jong-won's Theborn Korea pushes toward IPO

Celebrity entrepreneur and chef Paik Jong-won’s yearslong effort to list his food franchise firm Theborn Korea on the country’s main bourse has cleared its first hurdle, yet challenges remain as the fate of the company heavily depends on his fame.

Supported by a strong brand lineup and the rising public profile of its CEO Paik, Theborn Korea passed the preliminary review by the Korea Exchange for its initial public offering on Aug. 30, about three months after submitting its application. The company had initially begun preparations for the IPO attempt in 2018 but later postponed it, citing challenging market conditions during the COVID-19 pandemic.

"We will proceed diligently with the remaining steps to ensure a smooth IPO process," a Theborn Korea official said. "Through the IPO, we aim to foster sustainable growth with our franchise partners, while expanding into distribution and regional development projects to enhance shareholder value."

Founded by Paik in 1994, Theborn Korea is known for its focus on affordable menus featuring casual dining dishes and desserts, such as pork cutlets, jjajangmyeon, pizza, and coffee.

The company holds around 25 brands under its umbrella, including New Maul Restaurant, a Korean bistro focusing on traditional Korean barbecue, Hong Kong Banjum, which specializes in Korean-Chinese cuisine, and Paik’s Coffee, a coffee franchise renowned for its price competitiveness.

The company’s franchise brands have built a strong presence here, operating approximately 2,900 franchise locations nationwide. It has also expanded into the processed foods and sauces business and operates a hotel on Jeju Island. In 2023, the company posted 410.7 billion won ($309 million) in sales -- an increase of over 300 percent compared to 2019.

In particular, Paik’s extensive media appearance has contributed to elevating awareness of his brands. The 58-year-old entrepreneur’s simple and approachable cooking style shown in reality TV shows since 2015, combined with his business acumen, has made him relatable to a broad audience.

More recently, Paik’s appearance on the Netflix series "Culinary Class Wars" further boosted his popularity. In less than a week after its launch on Sept. 17, the show had garnered 3.8 million views across 18 countries, topping the global Netflix Top 10 Non-English TV Shows list. He also runs a YouTube channel that boasts over 6.4 million subscribers.

"Paik’s down-to-earth approach to cooking, coupled with his humorous and insightful commentary, resonated with viewers, reinforcing his image as a knowledgeable yet humble expert," said Lee Eun-hee, a consumer economics professor at Inha University.

"His various media appearances have helped draw attention to Theborn Korea's public reputation as well as its franchise businesses," Lee added.

In the meantime, though, Theborn Korea is facing regulatory challenges.

In June, franchisees of the company's ball-shaped pork cutlet restaurant brand Yeondon Ball Katsu filed complaints with the antitrust watchdog Fair Trade Commission, accusing the company of exaggerating revenue projections before their franchise contracts. The franchisees claimed that their actual sales and profits were much lower than the company had initially suggested.

While the outcome of the regulatory investigation is still pending, experts said that such scrutiny could have significant implications for Theborn Korea’s IPO efforts, citing the possible uncertainty among investors.

"In recent years when the company has grown rapidly, Paik's popularity has been a significant promotional asset for its franchise business. Legal risks stemming from disputes with franchisees could pose a threat," said a securities industry official who wished to be unnamed.

"Resolving disputes with franchisees and addressing concerns raised by regulators will be key to ensuring a successful IPO and continued growth in the competitive food industry," the official added.

Theborn Korea stated that it plans to conduct a book-building process for institutional investors in mid-October, with the aim of finalizing its offering price by the end of the month. The company expects to be listed on the Kospi by November, with the aim of raising between 69 billion and 84 billion won through the IPO.