[비즈한국] Conflict is escalating among creditors over whether to initiate rehabilitation procedures for the unmanned cafe franchise Manwolgyeong. While the application for rehabilitation was filed by one creditor, other creditors, including direct store contractors, are calling for its dismissal. Departing from standard procedures, the court has appointed an investigation commissioner prior to deciding on the commencement, signaling a cautious approach.
Creditor-Filed Rehabilitation for Manwolgyeong Faces “Dismissal” Demands from Others
The decision on whether to initiate rehabilitation procedures for Manwolgyeong is being delayed due to backlash from creditors. According to BizHankook, the Seoul Rehabilitation Court has decided to appoint an investigation commissioner to first examine the company’s financial status and going-concern value, rather than making an immediate decision on the commencement of rehabilitation.
Manwolgyeong faced a rehabilitation application from a creditor on July 23. Even when an application is filed, proceedings do not begin automatically; the court must issue a commencement order for the official rehabilitation process to start. Following a questioning of the representative on August 7, the court issued preservation orders and a comprehensive injunction while reviewing the case.
However, an investigation commissioner was appointed for Manwolgyeong even before a commencement decision was made. Given that such commissioners are typically appointed after the initiation of proceedings, this is an exceptional step. A court official explained, “The investigation commissioner will first conduct an inquiry, and the decision on whether to commence rehabilitation will likely be based on those results. While a decision could technically be made before the report is submitted, it seems highly likely that the court will wait for the findings.” The deadline for the commissioner’s report is December 24.
The appointment of the investigator before the commencement decision appears to be influenced by the series of opposing opinions from creditors, including direct store contractors. A court official noted, “It seems the investigation was initiated before a formal decision because a large number of petitions have been filed.” Court records show that since mid-August, petitions and opinion statements requesting the dismissal of the rehabilitation proceedings have been submitted consecutively.
Creditors argue that the rehabilitation application should be dismissed, raising issues with its timing and underlying motives. According to multiple creditors, some contractors who were demanding refunds of their deposits in June and July—just before the rehabilitation filing—seized the corporate accounts of Manwolgyeong. Shortly thereafter, a creditor, not the company itself, filed for rehabilitation. Once the court issued a comprehensive injunction, which restricted individual enforcement actions, creditors raised questions about whether the rehabilitation application was intended merely to block these seizures and enforcement measures.
One creditor claimed, “The fact that rehabilitation was requested immediately after the account seizure, and that it was filed by a creditor rather than the debtor Manwolgyeong, is suspicious. Manwolgyeong appointed legal counsel and responded to the questioning in a very short time, which leads us to suspect they may have known about the application in advance.”
Speeding Up Conversion of Direct Stores to Franchises… Contractors Fear “Reduction of Claims”
Founded in 2021, the unmanned cafe chain Manwolgyeong grew to operate over 500 locations nationwide, but recently, its management difficulties have intensified. Problems specifically arose from the “Direct Investment” model introduced in 2025. Under this structure, contractors cover facility costs while Manwolgyeong operates the stores and pays agreed-upon profits and rent. However, some contractors have been unable to open their stores months after paying their deposits. According to creditors, there are at least 20 such individuals who paid deposits but never saw their stores open.
Following the rehabilitation application last month, Manwolgyeong explained to BizHankook regarding the failure to open direct stores, stating, “Some investors wanted to pay the balance after the stores opened, which made it difficult to secure the necessary funds for facility installation.”
However, contractors who were unable to open their stores find this explanation unacceptable. One contractor refuted, “Manwolgyeong stated the startup cost was 55 million won and required 90% of the payment within seven days of signing the contract. Even those who couldn't open their stores have already paid 90% of the total. It is hard to believe they lacked installation funds after receiving that much money.” Currently, 17 such contractors have filed criminal complaints against Manwolgyeong CEO Kim Jae-hwan for fraud.
Recently, contractors from about 50 direct stores formed a separate creditors' group to take joint action. They argue that the list of creditors submitted to the court by the rehabilitation applicant and Manwolgyeong does not reflect the claims of the direct store contractors.
A representative for the creditors' group said, “During a meeting with direct store contractors on June 18, CEO Kim Jae-hwan stated, ‘I do not deny the debts,’ and ‘I recognize each and every individual’s claim.’ Yet, the list submitted to the court omits these contractors. Furthermore, in their response to the court’s questioning, they claimed there were no debts excluded from the rehabilitation list.” The representative added, “We formed this group to notify the court of the existence of our claims and to ensure they are protected.”
Meanwhile, Manwolgyeong is in the process of converting existing direct stores into franchises. According to store owners, Manwolgyeong informed them on August 15 that “it is inevitable that stores not yet converted to franchises will suspend operations starting August 18,” and asked them to decide whether to resume operations for open stores or whether to open stores that haven't launched yet.
The creditors' group suspects that the conversion is a move to reduce the scale of claims held by direct store contractors. One store owner said, “If a direct store is converted into a franchise, the rights and debt relations based on the original contract could change. Isn't this ultimately a way to reduce the amount owed to direct store contractors?”
In the franchise conversion contracts reviewed by BizHankook, it is specified that unpaid rent and settlement funds accrued up to the date of conversion will be maintained as existing debt. However, the contracts do not independently define whether the “right to request purchase”—the right for a contractor to sell the facilities back to Manwolgyeong for 30 million won—will remain in effect. The creditors' group worries that if the original direct store contract is terminated due to the conversion, this right may vanish as well.
BizHankook reached out to Manwolgyeong several times to hear their position on the purpose of the franchise conversion and the allegations raised by the creditors, but received no response.