[비즈한국] The management crisis at the unmanned cafe franchise 'Manwolgyeong' is deepening. Although the company grew rapidly, announcing it had surpassed 500 stores last year, it has been confirmed that a creditor recently filed a request with the court to initiate rehabilitation procedures for the company. To make matters worse, some direct-management store contractors have begun taking legal action, claiming they were unable to open their stores despite having paid their deposits.
Seoul Bankruptcy Court Reviewing Commencement of Rehabilitation
On August 7, the Seoul Bankruptcy Court issued a preservation order and a comprehensive injunction against the unmanned cafe franchise 'Manwolgyeong'. This follows the receipt of an application to initiate rehabilitation proceedings for the company on July 23. Consequently, until the court decides whether to initiate the proceedings, compulsory execution, provisional attachments, injunctions, and auctions for the exercise of security rights by rehabilitation creditors and secured creditors are prohibited. The court is currently reviewing whether to grant the rehabilitation request.
According to Bizhankook's investigation, the application for rehabilitation was not filed by Manwolgyeong itself, but by a creditor. The Debtor Rehabilitation and Bankruptcy Act allows creditors who meet certain requirements to apply for the commencement of rehabilitation proceedings against a debtor.
Manwolgyeong stated, "We are diligently participating in the court's procedures. The court issued the preservation order and comprehensive injunction at the same time as the hearing on August 7, and the decision on whether to initiate rehabilitation has not yet been made," adding, "We plan to proceed with merger and acquisition negotiations contingent upon the court's process and necessary permits."
Manwolgyeong is an unmanned cafe franchise brand launched in 2021. It started business during a period of rapid growth in the unmanned cafe market and steadily increased its store count, currently operating over 500 locations nationwide. It has also attracted a series of external investments: receiving 1 billion KRW in seed funding in 2022, followed by a 1.6 billion KRW Series A round from Hyundai Technology Investment in 2024. In March of this year, it received an additional 1.5 billion KRW from Hyundai Technology Investment.
However, despite the external growth, profitability worsened. While Manwolgyeong recorded 8.3 billion KRW in revenue and 700 million KRW in operating profit in 2023, it shifted to a loss in 2024, with operating losses reaching 1.1 billion KRW despite revenue increasing to 12.6 billion KRW. Net income also swung from a 600 million KRW profit to a 1.2 billion KRW net loss over the same period.
“Paid 60 Million Won But Still Cannot Open Store”: Direct-Management Contractors Take Legal Action
The fact that some direct-management store contractors have initiated legal action against Manwolgyeong is also notable. They claim that although they paid deposits to the headquarters to open stores, they have been unable to do so even months later.
In March 2025, Manwolgyeong introduced a "Direct Investment Model." In this model, if a contractor pays approximately 50 million to 60 million KRW to the headquarters, the company handles the interior, installs necessary equipment like coffee and dessert machines, and takes charge of store operations. The contractor receives a portion of the monthly revenue as profit, and if they provide their own space for the store, they can also receive separate rent payments.
A person named 'A', who signed a direct-investment contract with Manwolgyeong early this year to open a store in their own building, claimed that the store has not yet opened despite the deposit being paid. A said, "After paying 60 million KRW, the headquarters kept delaying the opening for various reasons," adding, "I understood the deposit was used for interior work and machine purchases, and I wonder if it was used for other purposes."
A claimed there are more contractors in similar situations, stating, "We have identified over 20 people who paid their deposits but could not open their stores. Some of them signed their contracts as far back as last November and still haven't been able to open." Some contractors are currently seeking criminal charges against Manwolgyeong.
Among store owners who have already opened and are operating under the direct-investment model, there are also claims that profit settlements are being delayed. According to several owners, Manwolgyeong has failed to settle profit payments on time for some owners since last June.
Manwolgyeong acknowledged the issues regarding delayed profit settlements and unopened stores. Kim Jae-hwan, CEO of Manwolgyeong, explained, "Funds that the company should receive are not coming in on time while expenses continue to accumulate, and since funds have been seized due to unpaid costs, it has become difficult to utilize the remaining capital for business."
Regarding the stores that failed to open, he explained, "Many investors in unopened stores want to pay the balance after completion, but the company needs upfront capital to proceed with the installation. A vicious cycle has occurred where conditions between both parties don't align, causing delays in securing installation funds, which then further delays construction and opening."
CEO Kim pointed to limitations in the profit structure as the background for the company's deteriorating management. He stated, "Manwolgyeong has relied on supplying raw materials and ingredients as its main source of revenue, as we do not charge franchise fees, promotional fees, royalties, or training fees. However, the scale of 'unauthorized purchasing' (where franchise owners buy raw materials from outside sources without headquarters consent) reached approximately 1.525 billion KRW over 22 months from September 2024 to June 2026. The unpaid balance for maintenance costs such as AS, server fees, and ARS was 112.88 million KRW as of August 5."
He continued, "A structure persisted where logistics, IT, and maintenance costs continued to arise even while income was not coming in properly. I don't intend to blame the store owners. It is the responsibility of the headquarters for not being able to block such a structure with systems."
Amidst the worsened financial situation, Manwolgyeong is pursuing management normalization through M&A. CEO Kim said, "We are negotiating to lower the sale price in exchange for the acquirer assuming all liabilities, including those owed to direct-management investors," adding, "I am deeply sorry for disappointing so many people. I believe my responsibility now is to ensure the company continues under better management and capital, and I will fulfill my responsibility to the end."