Feb 23 • 10:09 UTC 🇰🇷 Korea Hankyoreh (KR)

Increasing Chicken, Unfulfilled Coupang Orders... Owners of Cheogajip Trapped in 'Baemin Only'

The 'Baemin Only' agreement between Baedal Minjok and Cheogajip is causing controversy as it potentially forces franchise owners into a unilateral compliance, impacting their sales and market dynamics.

The recent collaboration between Baedal Minjok (Baemin) and the chicken franchise Cheogajip under the 'Baemin Only' agreement has sparked significant controversy. Ostensibly aimed at reducing intermediary fees to support franchise owners, the deal effectively excludes Coupang Eats, Baemin's main competitor, which raises concerns about market dominance and unfair trading practices. The promotion offers lower commission rates for Cheogajip locations that refrain from using Coupang Eats, incentivizing many franchisees to comply. Currently, approximately 90% of Cheogajip owners have joined this program, which runs from February 9 to May 8.

However, the choice to participate is being viewed as coercive. A document obtained by Hankyoreh indicates that among the key conditions for the Cheogajip-Baemin partnership, non-agreement renders franchisees ineligible for promotional discounts from Baemin. This has caused significant apprehension among owners, especially in competitive areas where refusal to join could result in no incoming orders. One franchise owner noted that being the only store without a discount coupon could effectively halt their business, forcing compliance with what they believe is an unjust system.

In addition to these pressures, some franchisees are reporting declines in revenue. With Baemin and Coupang Eats capturing about 70% and 30% of the market respectively, owners feel compelled to abandon a substantial portion of their business. Another owner expressed that their loss from opting out of Coupang Eats translates to significant monthly revenue loss, even as they attempt to balance potential savings from Baemin's promotional discounts. This growing dissatisfaction among Cheogajip franchise owners is indicative of larger concerns in the food delivery industry regarding fair practices and equitable competition.

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