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Angry franchisers sue Skinfood

Store operators of the financially struggling budget cosmetics brand Skinfood filed a lawsuit seeking compensation from the company in August, it was revealed Thursday. 

Four Skinfood franchisers asked the court to order Skinfood to compensate franchisers, citing poor management by Skinfood CEO Cho Yoon-ho, Skinfood confirmed.


In early October, Skinfood filed for court receivership because of its poor financial status. According to the regulatory filing, the company has been losing money for four consecutive years since 2014, with sales dropping 25 percent on-year to 126.9 billion won as of last year. Its debt reached 43.4 billion won with a 781 percent debt-equity ratio.

“I do not want to see a good brand like Skinfood going bankrupt, but CEO Yoon must stay out of the business,” said one of the Skinfood store owners who filed the lawsuit. 

Store owners also said that Yoon tried to avoid meeting with franchisers and pretended that he had not known about monthslong delays in the payment of sales commissions to some 400 Skinfood stores. 

“Even though the company decided to seek court receivership, there are Skinfood stores which are operated inside department stores or discount chain marts that cannot just shut down (due to rental agreements). It has become all of our responsibility,” said one of the suitors. 

The company said in a statement that they were looking for a way to solve this crisis with franchisers by having discussions through agents and consultants. 

This is not the first legal case that Skinfood has faced.

Earlier this month, Daegu District Court accepted a request for an injunction against Skinfood’s parent company iPEERES Cosmetics factory in Anseong, Gyeonggi Province. The request was filed by Skinfood’s 14 contracted companies after Skinfood failed to pay some 2 billion won for delivered goods.