SEOUL – A shocking scandal has emerged involving Myungryun Dang, the operator of the popular unlimited-refill meat franchise "Myungryun Jinsa Galbi." The company is accused of taking low-interest policy funds, created by taxpayers' money, and turning them into high-interest private loans for its own franchisees.

On May 10, the Korea Fair Trade Commission (FTC) announced that it has referred Myungryun Dang to a sub-committee for violations of the Fair Franchise Transactions Act. The allegations against the company are predatory: borrowing over 80 billion won in policy funds from state-run financial institutions like the Korea Development Bank (KDB) at interest rates of 3% to 6%, then lending that money to franchisees at rates as high as 18% through affiliated private lending entities.

A Sophisticated Scheme to Exploit the Vulnerable

The company’s methods were both calculated and bold. To evade oversight from the Financial Supervisory Service, Myungryun Dang reportedly distributed the funds across 14 different private lending companies established by its major shareholders—a tactic known as "split registration." These loans were primarily marketed to current and prospective store owners as "opening capital." Furthermore, the company is suspected of overcharging franchisees for interior design and equipment costs.

While the brand publicly promoted itself as a "Good Franchise," it was secretly operating a loan shark business behind the scenes, pushing small business owners into a "debt swamp." This betrayal of the partnership between franchisor and franchisee has sparked widespread public outrage.

Government Negligence and Systemic Failure

The more profound issue lies in the total failure of government oversight. State-run banks provided tens of billions of won without basic follow-up checks on how the funds were being utilized. Both the Financial Services Commission and the FTC remained oblivious while these illegal practices flourished. The fact that public taxes were used as "seed money" for private gain highlights a massive hole in the nation’s financial monitoring system.

Although the government has belatedly announced plans for aggressive responses—including the recovery of policy funds and pursuing punitive damages—critics argue this is a case of "fixing the stable after the horse has bolted."

A Call for Total Reform

This incident must not be dismissed as a one-off deviation by a single company. Experts are calling for a full-scale investigation into the entire franchise industry to uncover other hidden "gapjil" (abuse of power) practices.

The prevailing public sentiment that "government money is blind money" is a direct result of negligent management. To restore public trust, the government must significantly increase penalties for the misuse of policy funds and hold the supervising officials accountable for their failure. If taxpayer money continues to be handed out as capital for loan sharking due to government incompetence, the credibility of national policy will cease to exist.

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