For small business owners operating within South Korea’s highway rest areas, the dream of a steady stream of travelers often turns into a financial nightmare. What appears to be a lucrative location is frequently a trap, governed by a systemic loophole that allows private operators to withhold millions in payments although the state regulator looks the other way.
The human cost of this regulatory failure is devastating. Yun Cheol-su (a pseudonym), who operated a gift shop at the Giheung Rest Area on the Gyeongbu Expressway starting in 2019, saw his business generate monthly sales of approximately 20 million KRW. Yet, he never saw the full benefit of those sales. The private operator, In & Out, began withholding payments for goods, eventually accruing a debt of roughly 100 million KRW.
This was not an isolated incident for Yun. Since 2017, he had managed a coffee shop at the Manghyang Rest Area, where a related entity, JS Mulsan, withheld approximately 200 million KRW. When Yun attempted to seek help by filing a formal complaint with the Korea Expressway Corporation (KEC), the result was not relief, but retaliation. In & Out terminated his contract, wiping out 500 million KRW in interior and facility investments. Faced with aggressive demands from creditors, Yun took his own life in May 2020.
The ‘Product Supply’ Loophole
The root of these highway rest area payment disputes lies in a legal workaround used by private operators to bypass KEC regulations. Of the 215 rest areas nationwide, 201 are owned by the KEC, with 198 managed by private firms through competitive bidding. Under their contracts, these operators are strictly prohibited from subletting the operating rights to third parties.
To circumvent this, operators avoid traditional lease agreements. Instead, they sign “product supply contracts” with vendors. In this arrangement, the vendor manages the shop and sells the goods, but all revenue is deposited directly into the operator’s account. The operator then deducts a commission fee and the rent owed to the KEC before passing the remaining balance to the vendor.
This structure creates a dangerous power imbalance. Because the operator controls the cash flow, they can arbitrarily delay or withhold payments. The KEC, despite being the primary overseer, has historically failed to monitor whether these payments actually reach the small business owners.
Billions in Unpaid Obligations
The scale of the missing funds is staggering. Data obtained via the office of Rep. Kim Seong-hoe of the Democratic Party reveals a pattern of massive unpaid debts linked to a small group of operators.
| Rest Area | Operator | Unpaid Amount (KRW) |
|---|---|---|
| Giheung Rest Area | In & Out | 1.28 Billion |
| Manghyang Rest Area | JS Mulsan | 1.14 Billion |
| Chungju Rest Area | In & Out | 360 Million |
| Total | – | 2.78 Billion |
The crisis extends beyond these three locations. Yeongdong Leisure, which operated the Yeoju and Hoengseong rest areas until July 2024, is reportedly linked to over 10 billion KRW in unpaid wages and goods payments spanning a decade. Similarly, Yeonhap Jinheung, the operator of the Goseong Dinosaur Land rest area, has faced similar payment disputes for five to six years.
A ‘Paper Tiger’ Evaluation System
Critics argue that the KEC’s oversight is intentionally toothless. The corporation conducts annual “Operation Service Evaluations,” grading operators from 1 to 5. A score of 5, received twice, is grounds for contract termination. However, operators like In & Out and JS Mulsan—despite their history of payment defaults and reports of workplace safety cover-ups—have never received a grade 5.
The KEC has defended this by stating that the weight given to payment disputes in the grading system is low to avoid infringing upon the “management autonomy” of the private operators. The agency noted that while warnings and penalty points are issued for payment delays, high scores in other performance metrics can offset these failures, resulting in an average grade that protects the operator from termination.
This regulatory leniency is further complicated by a “revolving door” phenomenon, where retired KEC officials frequently secure high-paying positions within the very private firms they once supervised, raising concerns about organizational collusion and a lack of genuine accountability.
Corporate and Agency Defenses
In response to the allegations, In & Out has attributed the payment delays to financial hardship, claiming that the Giheung Rest Area suffered an operational loss of 14 billion KRW over the past decade.
The KEC maintains that its current system is balanced, but the disconnect between the agency’s “average” grades and the reality of bankrupt vendors suggests a system designed to protect operators rather than the entrepreneurs who keep the rest areas running.
This report involves matters of financial loss and legal disputes. Readers seeking legal advice regarding commercial contracts should consult a licensed legal professional.
If you or someone you know is struggling or in crisis, help is available. You can call or text 988 in the US and Canada, call 111 in the UK, or contact local mental health support services in South Korea via the Korea Suicide Prevention Center.
The next phase of this investigation will focus on the upcoming legislative review of the KEC’s outsourcing contracts, where lawmakers are expected to demand a restructuring of the “product supply” model to ensure direct payment systems for vendors. We will provide updates as the parliamentary audit progresses.
Do you have information about rest area operations or similar corporate disputes? Share this story or contact our newsroom.
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