[News Space=Reporter seungwon lee] BR Korea (CEO Do Se-ho), the operator of Baskin Robbins and Dunkin', continues to suffer from a abnormal profit structure, posting operating losses for two consecutive years in 2025. Despite revenue of 707.6 billion KRW, the company recorded an operating loss of 5.7 billion KRW, signaling that it is losing money on its core business.

With internal transactions with SPC affiliates reaching 304.6 billion KRW, reliance on group-wide fund flows is deepening. Concerns regarding corporate financial health are mounting due to royalty payments to the US headquarters, multiple legal lawsuits, and dividends concentrated on the owner family.

Revenue and Profit Breakdown

According to the audit report (Samjong KPMG), 2025 revenue was 707.6 billion KRW, a 0.7% decrease from the previous year. Although gross profit was 344 billion KRW, SG&A expenses of 349.7 billion KRW exceeded gross profit, resulting in an operating loss of 5.7 billion KRW (an improvement from the 9.9 billion KRW loss the previous year). However, thanks to non-operating income, such as 13.26 billion KRW in interest income, the company recorded a net profit of 5.89 billion KRW, an 18.2% increase from the previous year (4.98 billion KRW).

SG&A Structure and Commission Fees

The primary cause of the operating loss is excessive SG&A expenses. Commission fees, which accounted for the largest share at 140 billion KRW (up 6% year-on-year), represent 19.8% of total revenue. Advertising expenses dropped by 18.1%, and employee salaries and rent also decreased, suggesting cost-cutting measures amidst shrinking revenue.

Royalties to US Headquarters

Under its trademark licensing agreement, BR Korea pays 1.5% of Baskin Robbins revenue and 1% of Dunkin' revenue to Dunkin' Brands Group, Inc. In 2025, the company paid 7.71 billion KRW in royalties, a fixed cost that must be paid regardless of the company's operating loss status.

Internal Transactions with SPC Group

Internal transactions with related parties (SPC Group) reached 304.6 billion KRW, a 7.9% increase from the previous year. Notable transactions include 91.2 billion KRW paid to Secta Nine and 95.6 billion KRW in transactions with SPC GFS. A significant portion of BR Korea's revenue is recycled back into the group through these channels.

Owner Dividends

The company paid a total of 1.77 billion KRW in dividends in 2025 (2,950 KRW per share), an 18% increase from the previous year. With the owner family (SPC family) holding 66.67% of shares, they received approximately 1.18 billion KRW. Criticisms are rising that this dividend increase is a means of transferring cash to the owner family while the core business remains in the red.

Legal Disputes

BR Korea is involved in 7 ongoing lawsuits totaling 8.18 billion KRW. Notable cases include a damage suit by the Korea Music Copyright Association and a collective damage suit by 416 individuals. Additionally, the company is engaged in a 5 billion KRW unjust enrichment lawsuit against NH Investment & Securities and a suit against the Fair Trade Commission to cancel a corrective order.

Expert Analysis

A corporate finance analyst commented, "BR Korea's 2025 results reveal it as a company that 'lives off interest,' creating net profit through interest income on short-term financial products rather than its core business. Its massive internal reserves of 355 billion KRW paradoxically hide its lack of real competitive strength in operations."

The analyst added, "The company's financial structure—with 7.7 billion KRW flowing to the US headquarters in royalties, over 300 billion KRW in internal transactions, and an 18% increase in dividends to the owner family despite operating losses—contains complex risks hidden behind a seemingly stable debt-to-equity ratio."