Business Agreement with Woowa Brothers for 'Baemin Only'
Exclusive Sales in Exchange for Reduced Commission Fees
Delivery App War Intensifies
Kyochon Chicken, a chicken franchise brand, will be removed from the delivery app Coupang Eats. This comes as Baemin (Baedal Minjok), the leading delivery app, has signed an exclusive 'Baemin Only' sales agreement with Kyochon Chicken, offering reduced commission fees as a condition.
According to industry sources on June 25, Kyochon F&B, which operates Kyochon Chicken, is set to sign a 'Baemin Only' business agreement with Woowa Brothers, the operator of Baemin. The main points of the agreement are that Baemin will lower the intermediary commission fees paid by Kyochon Chicken franchise owners, and in return, franchise owners may withdraw from Coupang Eats at their discretion. Franchise owners can continue to be listed on Yogiyo, the public delivery app Ttaenggyeoyo, and Kyochon's own app.
Currently, franchise owners listed on both Baemin and Coupang Eats pay intermediary commission fees ranging from 2.0% to 7.8%, depending on their sales volume. Those in the top 35% pay a 7.8% commission fee.
Kyochon appears to believe that the reduction in commission fees, despite the restriction on sales channels, will have a positive effect for franchise owners and has begun persuading them. In fact, it is reported that the majority of franchise owners have agreed to the decision to withdraw from Coupang Eats.
However, the specific preferential intermediary commission rate has not been disclosed, and the decision to withdraw from Coupang Eats is reportedly left to the discretion of each franchise owner.
Woowa Brothers is also planning to support franchise owners in boosting their sales through Kyochon Chicken discount events and other initiatives. The two companies plan to begin the Baemin Only agreement as early as next month and maintain the partnership for two to three years.
Meanwhile, the agreement between Baemin and Kyochon marks the first case where a delivery app has offered preferential benefits to a major franchise, leading to its withdrawal from a competitor. This case is expected to trigger increased competition among delivery app platforms to attract major franchises.
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