The representative brand of the restaurant franchise Theborn Korea, Paik's Coffee, is showing signs of seeking a new model. As controversies surrounding Paik Jong-won, the CEO of Theborn Korea, have impacted the brand image and sales, causing hardships for franchise owners, an internal review is being conducted. This is the first time in 17 years since the launch of the Paik's Coffee brand. Until now, Paik's Coffee has used CEO Paik as a model for its logo and new menus.
According to the industry on the 31st, Theborn Korea listened to the opinions of franchise owners regarding the use of a new brand advertising model during a 'Paik's Coffee franchise owner meeting' held earlier this month. As the brand image represented by CEO Paik deteriorated amidst various controversies and sales were hit hard, the franchise owners expressed the opinion that 'a new face is needed.'
A representative of Theborn Korea said, 'Using famous celebrities as models increases marketing expenses. Considering the economic burden on franchise owners, we have produced promotional posters and logos featuring CEO Paik instead of hiring separate models.' They added, 'While there are no specific details yet, such as narrowing down the candidates for a model, we are currently listening to the opinions of the franchise owners.'
Paik's Coffee is considered a core brand of Theborn Korea. In the first half of last year, Paik's Coffee's sales reached 78.9 billion won, accounting for 44.6% of the sales from the franchise brands operated by Theborn Korea. Since the brand's launch in 2008, Paik's Coffee has never used external advertising models, thanks to the high recognition of CEO Paik. Thus, they felt no need to spend on expensive celebrity or star models.
This strategy of Paik's Coffee changed as CEO Paik recently became embroiled in various controversies. Issues such as false labeling of origins, use of industrial cooking utensils, quality of Paik's Ham, and allegations of broadcast abuse negatively impacted sales. According to sales data submitted by the Financial Supervisory Service to the office of Cha Kyu-geun, a member of the Rebuilding Korea Party, the increase in sales for Paik's Coffee has decreased following the controversies. The average daily sales for Paik's Coffee in March were 438.76 million won, which was an 11.8% increase from the previous month. However, the average daily sales in April, when the controversies spread, only rose by 1.9% compared to the previous month.
There are also analyses in the industry suggesting that the success of the 'big model' strategy of competing low-cost coffee brands may have influenced this decision. The goal seems to be to restore the tarnished image due to CEO Paik and boost declining sales.
Since selecting soccer player Son Heung-min as a model in 2022, Mega MGC Coffee has increased its number of franchises from 2,173 to 3,551 this year. The operating profit last year also surpassed 100 billion won. Compose Coffee similarly saw its franchises grow from 1,901 to 2,812 after selecting BTS member V as their model in 2023. Its operating profit last year also increased by 9% from the previous year to 40 billion won. Both brands continue to feature Son Heung-min and V as their models. Another low-cost coffee brand, Mammoth Coffee, has also selected actor Kim Woo-bin as their model this year, while Theventi has recently chosen G-Dragon as a model for its rebranding.
An industry source noted, 'The strong association of 'Paik's Coffee = Paik Jong-won' suggests that there is a consensus among the franchise owners that this connection needs to be severed,' adding, 'Haven't they seen the sales increase directly through famous celebrities? It's a situation where opinions to benchmark this aspect are likely to arise.'
Seoyong-gu, a professor at Sookmyung Women's University, stated, 'Even if they hire external models that align with the image and philosophy that Paik's Coffee pursues, the 'human risk' will not completely disappear in the medium to long term.' He suggested that considering characters or fictional figures that resonate with Paik's Coffee could also be worth exploring.