Nolboo, a first-generation Korean restaurant franchise famous for budae jjigae (sausage stew) and bossam (boiled pork), has reportedly applied for corporate rehabilitation with the court due to management difficulties.

Analysts point to deteriorating financial conditions as the cause, with operating losses surging to 8.7 billion won last year and the capital impairment rate exceeding 80%.

The Seoul Bankruptcy Court reportedly issued a comprehensive prohibition order against Nolboo on the 4th.

This is a measure that prevents the company from disposing of assets or repaying debts without court permission until a decision is made on whether to commence rehabilitation proceedings, and it also restricts creditors from filing provisional seizures, provisional injunctions, and compulsory executions.

The court is expected to decide whether to commence rehabilitation proceedings following a representative interrogation scheduled for the 11th.

Nolboo's visit to the bankruptcy court is attributed to years of sluggish performance.

Nolboo was once a leading domestic Korean restaurant franchise with nearly 1,000 franchise stores and annual sales exceeding 120 billion won, spearheaded by bossam and budae jjigae. However, amid intensifying competition in the restaurant industry and the COVID-19 pandemic, it recorded operating losses for six consecutive years from 2017 to 2022.

Although it succeeded in turning a profit in 2023, it subsequently returned to a deficit.

Nolboo's sales last year dropped by about 16% to 63.9 billion won from 76.1 billion won the previous year, while operating losses during the same period were analyzed to have ballooned more than 14-fold from 600 million won to 8.7 billion won.

Nolboo, which started as a bossam restaurant in 1987 by former CEO Kim Soon-jin and enjoyed nationwide popularity as a first-generation domestic franchise industry player, was acquired by a private equity firm affiliated with Morgan Stanley, and investment purpose company NB Holdings has held management rights since 2022.

An official from NB Holdings, Nolboo's largest shareholder, stated regarding the corporate rehabilitation application, "We have no official stance to express at this time."

(Reported by Kim Taewon | Video by Lee Eui-sun | Graphics by Yook Do-hyun | Produced by SBS Digital News)