Average revenue at South Korean franchise outlets fell 7.6 percent over three years despite combined sales at headquarters climbing 10.8 percent in the same period, revealing deepening inequality between brands and store owners.
The divide was sharpest in the pizza sector, where headquarters’ sales surged 67 percent while outlet sales tumbled nearly 12 percent, data from research firm Leaders Index showed on Friday.
"Typical signs of market saturation are emerging in the dining, chicken, pizza and convenience store sectors, where the number of outlets is rising but sales per store are falling," Leaders Index said in a statement, adding that "the growth imbalance in the franchise industry has intensified over the past three years."
From 2022 to 2024, total sales by franchise headquarters jumped to 47.8 trillion won ($33.6 billion), while the average annual revenue of individual outlets slipped to 324.8 million won. The number of stores grew 6.6 percent over the same period, indicating market saturation as more outlets chased smaller slices of the pie.
Leaders Index analyzed performance across seven sectors — coffee, chicken, pizza, convenience stores, bakeries, restaurants and cosmetics — based on filings to the Fair Trade Commission and the financial disclosure system.
It said price increases driven by inflation largely boosted headquarters’ profits rather than franchisees’ earnings.
The imbalance was most pronounced in pizza, where sales at seven franchise headquarters jumped from 418.9 billion won to 1.12 trillion won, while per-store sales fell from 353.8 million won to 311.6 million won despite an 8 percent rise in store count.
Only the coffee and beverage segment saw growth for both sides. Headquarters’ sales soared 33 percent to 3.94 trillion won and average store sales rose 14 percent as the number of outlets expanded nearly 20 percent to 11,513. Operating profit for those headquarters climbed 81 percent to 254.8 billion won.
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