"COVID-19" 9 Months... "From Closures to Sales" Collapsing Food Service Franchises

CJ Foodville Sells Off Dining Brands and Factories One After Another
E-Land Eats Declares Emergency Management
Popeyes and Mr. Pizza Also Close Stores and Seek Buyers

[Asia Economy Reporter Choi Sunghye] As the spread of the novel coronavirus infection (COVID-19) continues for the ninth month in South Korea, large dining franchises that have been hit hard are collapsing one by one. Especially, brands that have operated mainly through dine-in stores have been on a downward spiral, closing dozens of branches in the first half of the year alone, and are ultimately moving toward the process of being sold.

According to the dining industry on the 15th, CJ Foodville, which operated large franchises focused on dine-in stores such as Gyejeol Bapsang, VIPS, and Jeil Jemyunso, sold its production base, the Jincheon factory, to CJ CheilJedang to offset losses. The purchase price is 20.737 billion KRW, and the transfer date is November 30. With the sale of the Jincheon factory, CJ Foodville’s production base has effectively disappeared. The Eumseong factory is also likely to be transferred along with the sale of Tous Les Jours.

CJ Foodville is restructuring its major dining businesses to recover from losses. In July, CJ Foodville sold its remaining 15% stake in Twosome Place to the Hong Kong-based private equity fund Anchor Equity Partners for 71 billion KRW, but it recorded an operating loss of 6.5 billion KRW last year (separate basis). Although restructuring was carried out this year, the deficit widened due to COVID-19. Ultimately, Tous Les Jours, a core business, has also selected Deloitte Anjin as the lead manager and is proceeding with the sale process.

Naturebyul-gok Store Exterior [Provided by Naturebyul-gok]

Eland Eats, which operates brands such as Natural Table, Susa, and Ashley, is also facing a crisis. In July, Eland Eats declared emergency management and business strategy restructuring due to the impact of COVID-19. Kim Wansik, CEO of Eland Eats, stated, "We closed about 30 stores in the first half of the year and are considering additional measures," adding, "We will boldly withdraw brands that are not chosen by customers and simultaneously reorganize strategies for some existing brands."

Closure Notice of Popeyes Prime Branch Posted on Social Network Service (SNS)

Popeyes, once considered one of the two major domestic chicken and burger brands along with KFC, is struggling with its sale and rumors of withdrawal are circulating. Recently, one store announced its closure, hinting at the closure of all domestic stores, but Daehan Je-dang, which operates Popeyes through its affiliate TS Food & System, stated, "It is not a closure of all stores," and expressed its intention to continue pursuing the sale of Popeyes.

(Photo by Yonhap News)

MP Group, which operates the native pizza franchise 'Mr. Pizza' with a 30-year history, is also being sold to the domestic private equity fund TR Investment. MP Group announced in July that it had selected TR Investment as the preferred negotiation partner for the sale. Mr. Pizza recorded operating losses of 1.7 billion KRW in 2017, 377 million KRW in 2018, and 2.46 billion KRW in 2019.

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