The Highest Opening Rate Among Food Service Franchises Is 'Coffee' · The Highest Closing Rate Is 'Chicken'

Fair Trade Commission, Status of Franchise Industry as of the End of 2019

Current Status of Major Franchise Food Service Outlets.

[Sejong=Asia Economy Reporter Joo Sang-don] Among dining-out franchises last year, the industry with the highest opening rate was 'coffee,' while the industry with the highest closure rate was 'chicken.'

On the 26th, the Fair Trade Commission disclosed the 'Status of the Franchise Industry as of the End of 2019,' based on the disclosure documents registered by franchise headquarters.

According to the report, the total number of dining-out franchise stores reached 122,574, an increase of 4.6%. Coffee stores increased by 7.9% to 15,036, and chicken stores increased by 2.4% to 25,188. Bakery and confectionery stores (8,347) rose by 3.7%, pizza stores (6,400) by 2.4%, and fast food stores (4,179) by 1.9%.

The overall opening and closure rates for dining-out industries were 17.4% and 10.8%, respectively. Among major dining-out sectors such as chicken, pizza, coffee, fast food, and bakery, the coffee industry had the highest opening rate at 18.5%, while the chicken industry had the highest closure rate at 10.6%.

Average sales exceeded 400 million KRW in the fast food and bakery sectors, whereas chicken, pizza, and coffee sectors recorded less than 300 million KRW. Notably, over 25% of coffee brands had average sales below 100 million KRW.

The average brand survival period in the dining-out sector was 6 years and 5 months. The fast food sector had the longest average survival period at 8 years and 2 months, followed by chicken (7 years 11 months), bakery and confectionery (7 years 9 months), pizza (6 years 10 months), and coffee (6 years 2 months).

In the retail and wholesale franchise sectors, convenience stores increased by 6.3% to 42,712 stores, while cosmetics stores decreased by 22.1% to 3,407 stores. Among major retail and wholesale sectors, general retail stores had the highest opening rate at 24.0%, and cosmetics had the highest closure rate at 16.8%. Average sales exceeded 500 million KRW in general retail and convenience store sectors, whereas agricultural and marine products sectors recorded less than 300 million KRW.

Regarding the number of franchise headquarters and brands, the dining-out sector accounted for the largest share at 75% of all industries, followed by service industries such as education and laundry at 20%, and retail and wholesale including convenience stores at 5%. The dining-out sector also had the highest number of franchise stores, accounting for 48.2% (122,574 stores) of all industries.