[News Space=Reporter seungwon lee] BonIF (CEO Cheol-ho Kim), which operates ‘Bonjuk,’ ‘Bon Bibimbap,’ and ‘Bon Dosirak,’ continued its growth by surpassing KRW 400 billion in annual sales and KRW 20 billion in operating profit. 

It is regrettable that the family-owned business, in which the family owns 100% of the shares, paid out 3.3 billion won in dividends in 2023, a 7% increase from the previous year (2022) of 3 billion won. Since all shareholders are family members, the 3.3 billion won in dividends went to all five members of Chairman Kim Chul-ho's family. The shareholding structure is as follows: Chairman Kim Chul-ho owns 66.47%, his spouse Choi Bok-i owns 31.13%, and his children Kim Ji-hye owns 0.8%, Kim Jo-eun owns 0.8%, and Kim Yul-min owns 0.8%.

Chairman Kim Chul-ho, the founder and owner of Bon-AI, and his children received dividends of 1.5 billion won in 2014, 1.3 billion won in 2017, 3 billion won in 2021, 3 billion won in 2022, and 3.3 billion won in 2023. 

An industry insider said, "The original purpose of dividends is to return the retained earnings, which are the fruits of excellent management performance, to shareholders," adding, "It is somewhat frowned upon for a family company that is unlisted and whose shareholders include Chairman Kim Chul-ho and his wife and their three children, to pay such high dividends."

According to the Financial Supervisory Service's electronic disclosure system on the 7th, BonIF recorded sales of 451 billion won and operating profit of 20.7 billion won last year.

Sales increased 9.7% from 411.3 billion won the previous year, and operating profit increased 10.7% from 18.7 billion won the previous year. The operating profit ratio also recorded 4.6%, showing rapid growth. Net income also recorded 14.2 billion won, up from 13 billion won the previous year.

In February 2022 and February 2023, they raised prices in succession. Coincidentally, the timing of the price increase coincided with the selection of Lim Young-woong as a model, leading to some consumers pointing out that "they are passing on the advertising model fee to the consumers." In particular, they were criticized for "raising the product price to pay for a top star model" by using the expensive Lim Young-woong, who is known for "costing what he calls it."

In addition, while competitors such as 'Jukiyagi' and 'Matkkalchamjuk' froze their existing prices, 'Bonjuk' alone raised its price in 2022 when the price of the raw material 'rice', the main ingredient in porridge, had fallen, drawing harsh criticism.

In fact, BonIF's performance has fallen to half of its original value, and its management situation has worsened. Due to financial interest from the purchase of a new building, the profitability has become even more difficult. However, BonIF has become an issue due to the fact that it only fills the pockets of the owner's family with dividends and salaries despite its serious management difficulties.

A food industry insider said, "Despite the economic recession and rising prices, they quietly raised their prices and have now entered the '20,000 won price era', and it seems that the image of coexistence with franchisees has also disappeared."

Sales and administrative expenses increased from KRW 63 billion in the previous year to KRW 65.2 billion, salaries also increased from KRW 24.6 billion in the previous year to KRW 27.1 billion, and donations increased from KRW 820 million in the previous year to KRW 990 million. In particular, advertising and publicity expenses increased sharply by 47% from KRW 4.5 billion in the previous year to KRW 6.6 billion.

The external structure of the group is a triangle of 'Bon IF (franchise business including Bonjuk),' 'Bon Food Service (group catering, food material distribution, concession),' and 'Soonsu Bon (baby food specialist),' each specializing in their own strengths. In 2022, a holding company division was newly established in Bon IF, which will also take on the role of a de facto holding company.

According to figures disclosed in the Fair Trade Commission's franchise business information system, the number of stores (as of 2022) is 748 Bonjuk, 837 Bonjuk & Bibimbap, 436 Bon Dosirak, 52 Bon Seolleongtang, 11 Bonuri Bansang, 11 Menji (as of 2024), and 1 Manna-gye (as of 2024).

The number of Bonjuk stores decreased from 1,172 in 2017 to 748 in 2022. As of 2023, it will decrease further to 651. The number of Bonjuk stores continues to decrease. In other words, it is evidence that new stores are not increasing, and the number of closed stores is increasing.

Looking at the contents of the audit report, it appears that there was active trading with related companies (Bon Oceans, Bon World, Mannagye) that are special related parties. Some people suspect that this is a case of family management leading to a concentration of work.

Regarding this, a BonIF official explained, "Bon Oceans is a separate legal entity that conducts research on aquaculture business for the supply of abalone, Manna World is an investment for the purpose of testing new brands, and Bon World is a separate legal entity for overseas business."

Also notable is the short-term borrowing of 35.9 billion won last year. Regarding this, the company explained, "The short-term borrowing is a cost incurred when purchasing a building in 2018."

Short-term borrowings were KRW 7 billion in 2019, KRW 8.7 billion in 2020, KRW 43.6 billion in 2021, KRW 39 billion in 2022, and KRW 35.9 billion in 2023. Short-term borrowings usually refer to current liabilities that must be repaid within one year. Some point out that the ratio of borrowings to total capital is high, so it is necessary to check financial soundness.

Meanwhile, CEO Kim Chul-ho and his wife were indicted on charges of causing damage to the company by registering trademarks such as “Bon Dosirak,” “Bon Woori Deopbap,” and “Bon Bibimbap” under their own names instead of the company’s between September 2006 and May 2013, receiving approximately 2.829 billion won in trademark usage fees and trademark transfer fees (breach of trust under the Act on the Aggravated Punishment, etc. of Specific Economic Crimes). 

In addition, former CEO Choi Bok-i is also suspected of causing damage to the company by receiving 5 billion won in company funds in the name of special severance pay upon retirement in November 2014.

The court found him not guilty of the charge of breach of trust regarding the trademarks 'Bon Dosirak' and 'Bon Bibimbap'. However, it found him guilty regarding the Bon Woori Rice Bowl trademark. In the case of the 'Bon Woori Rice Bowl' trademark, it was determined that registering it under the name of former CEO Choi was a breach of professional duty as it was a result of creation during the period of service contract with Bon IF.

Regarding the 5 billion won severance pay paid to former CEO Choi Bok-yi, Bon-AIF emphasized, “The second trial court ruled that ‘when considering the regulations and laws regarding the treatment of executives, it is difficult to conclude that there is no special severance pay provision for this case,’” and “It was paid legally during the management process.”