bhc with 'Samsung DNA'... Surpassing the "3 Trillion Won Barrier" through Transparent, Professional, and Win-Win Management

Food Service Industry Hits Dream Revenue of 300 Billion Won... Over 5x Growth in 6 Years
'Professional Management System'... Chairman Park Hyunjong & CEO Im Geumok's Samsung DNA Success Foundation
Win-Win Management... Promise to Launch 2+ New Products Annually 'Birth of Bburinkle & Matcho King'

[Asia Economy Reporter Lee Seon-ae] A tectonic shift has occurred in the domestic chicken franchise market. bhc has joined the 300 billion KRW brand club, reshaping the chicken market into a two-strong system with Kyochon and bhc. The driving force behind this is the 'Samsung DNA' embedded in bhc. Since BBQ acquired the company facing bankruptcy in 2004 and sold it to a private equity fund in 2013, both Chairman Park Hyun-jong, who has been leading bhc, and President Lim Geum-ok, who joined in 2017 at Park’s invitation, are former Samsung Electronics employees. Although bhc’s ownership has changed three times since Chairman Park, who led bhc’s independent management starting in 2013, acquired it in 2018, the deeply rooted Samsung success DNA has propelled bhc’s rapid growth.

Matchoking.

◆ Fivefold Rapid Growth Over Six Years = According to bhc on the 13th, bhc’s sales last year reached 318.6 billion KRW, surpassing 300 billion KRW for the first time in history. This is a 34% jump from 237.5 billion KRW in 2018. Compared to the pure sales (excluding other companies’ service sales) when bhc began independent management in 2013, it has grown more than fivefold in six years since acquisition. The industry ranking, which was 7th to 8th at that time, rose to 2nd place in 2016, and eventually entered the 300 billion KRW club, a milestone figure.

In the food service industry, 300 billion KRW in sales is a dream figure. According to the Fair Trade Commission’s franchise business transaction data, as of 2019 disclosure registration, about 3,600 food franchise headquarters are registered. Excluding those operating in non-food business sectors, fewer than 10 have sales exceeding 300 billion KRW. Thus, surpassing 300 billion KRW in sales is a barometer proving a company’s stability and growth potential.

bhc’s remarkable growth is also evident in other indicators. The number of franchise stores increased from about 700 in 2013 to about 1,450 last year, an increase of approximately 750 stores, and the average annual sales per franchise store rose from 140 million KRW in 2013 to 460 million KRW in 2019, more than tripling. This means the average annual sales growth rate per franchise store (228%) outpaces the franchise store number growth rate (107%), indicating both quantitative and qualitative growth. Additionally, the number of franchise stores with annual sales exceeding 1 billion KRW surpassed 20 last year.

Chairman Park Hyunjong.

◆ Establishment of a Professional Management System = The beginning of bhc’s success story lies in establishing a professional management system initiated by independent management. At the time of starting independent management in 2013, most franchise businesses were run by founders, but bhc welcomed a professional manager from Samsung Electronics as the head, bringing new winds to management and organizational culture.

Chairman Park eliminated irrational practices and began transparent management. He made bold investments in IT systems and established new work processes, transforming the management structure into a system-centered one. Currently, bhc’s chicken division operates as a single independent corporation without a separate subsidiary. This corporate structure enables transparent management and efficient operation of selling and administrative expenses by preventing unnecessary expenditures.

Accordingly, selling and administrative expenses decreased from 35.5 billion KRW in 2018 to 30.1 billion KRW in 2019, while operating profit increased from 60 billion KRW to 97 billion KRW during the same period. A bhc official emphasized, "Maximizing internal cost efficiency is a management strategy that significantly differentiates us from other companies."

Bold investments were also made to improve business infrastructure. Facilities were installed to maintain legal temperature standards in delivery vehicles traveling between logistics warehouses and franchise stores, and GPS devices were attached so franchise stores can monitor delivery status and estimated arrival times. All eight logistics hubs in provincial areas were relocated to fully equipped logistics centers to improve logistics quality. Operating about 100 delivery vehicles, bhc has built an in-house logistics system rather than outsourcing, securing logistics competitiveness such as cost reduction.

In 2016, bhc invested 6 billion KRW to build a new factory with state-of-the-art facilities in Icheon, Gyeonggi Province. The factory has an annual production capacity of about 9,800 tons and supplies fresh and safe ingredients not only for chicken but also for other food service brands operated by bhc, such as Changgo43 and Keunmam Halmae Sundaeguk. Research and development infrastructure was also established. In 2015, the research center space was expanded and equipped with the latest research equipment. Hit products born here, such as 'Ppurinkle' and 'Matchoking,' have been the foundation of explosive growth.

President Im Geum-ok./Photo by Jang Jin-hyeong aymsdream@

◆ Win-Win Management as Another Pillar of Success & Goal to Become No.1 in Chicken = Besides professional and transparent management, bhc’s management philosophy includes another important value: win-win management. bhc places the highest value on win-win management with franchise stores and has promised to release at least two new products annually to increase franchise store sales, a promise that has never been broken to date.

Moreover, Chairman Park and President Lim focus on strengthening active communication with franchise stores. To hear vivid voices, suggestions, and difficulties from franchise stores, they toured local regions nationwide twice last year, in May and October, fostering a shared growth consensus.

bhc has successfully expanded its business beyond chicken to operate about 2,000 stores domestically under brands such as Changgo43, Keunmam Halmae Sundaeguk, and GramGram. Last year, total sales reached 410 billion KRW, with a target of 530 billion KRW this year.

The goal is to leap to No.1 in chicken. The sales target for this year is set at 400 billion KRW. To achieve this, bhc is focusing on expanding franchise store infrastructure. It has supported some costs for franchise stores struggling with insufficient facilities due to increasing order volumes to help them establish proper equipment systems.

Efforts are also concentrated on expanding consumption through product reorganization. A notable area is the partial chicken meat market. The 'Wingstar Series,' composed only of wing parts, has been very popular, selling 900,000 units within three months after its release at the end of last year. Riding this success, bhc recently introduced the 'Stick Series,' made only with chicken legs, and the 'Combo Series,' which allows customers to enjoy both wings and chicken legs. A bhc official said, "Through win-win management with franchise stores, we plan to write a new success story again this year."

This content was produced with the assistance of AI translation services.