bhc Franchise Owners "Profitability Worsening... Price Increase Needed"

2023 Second Half Mutual Growth Consultation Meeting on the 14th

Following Kyochon Chicken's average price increase of 3,000 KRW for major chicken products last April, bhc Chicken is also reportedly considering a price hike. This comes as franchisees' profitability deteriorates due to fixed costs such as labor and rent, delivery commission burdens, and rising raw material prices, leading to growing demands for price increases.

bhc Chicken announced on the 20th that it held the ‘2023 Second Half Meeting’ for win-win cooperation together with the nationwide franchisee council on the 14th.

On the 14th, the 2023 second half meeting of the National Franchise Store Council was held at the bhc R&D Center located in Songpa-gu, Seoul.
[Photo by bhc]

This meeting, the fifth held this year, took place at the bhc R&D Center located in Songpa-gu, Seoul, with about 30 representatives from regional franchisee councils across eight provinces attending.

Moon Sang-man, head of bhc Chicken's franchise business division, stated, “The choices of franchisees and consumers are directly linked to bhc Chicken's growth,” adding, “Next year, we will continue to provide various support from the headquarters to increase franchise sales and improve profitability by expanding the customer age groups.”

At the meeting, the franchisee council strongly urged the establishment and prompt implementation of realistic measures to improve franchise profitability, which they have continuously requested.

One franchisee attending the meeting said, “The burden of fixed costs such as labor and rent, as well as variable fees like order brokerage commissions and delivery fees, is increasing year by year,” adding, “If this continues, franchise profitability will worsen and may eventually turn into losses. To improve profitability, direct and tangible measures from headquarters, such as the recent reduction in frying oil supply prices, must be sustained.”

Another franchisee said, “Consumer adjustment regarding products is necessary for improving franchise profitability. Of course, in the current situation of rising prices, consumer adjustments such as price increases require a cautious approach,” adding, “If price adjustments are made within the overall established chicken price range, it will not only gain consumer understanding but also greatly help improve franchise profitability. The price adjustments we have requested several times should now be implemented,” urging active consideration of price adjustments.

bhc Chicken stated that it is considering a price increase as one of the win-win measures between headquarters and franchisees.

A bhc Chicken official said, “Since early this year, we have held several win-win cooperation meetings, and the headquarters has continuously made efforts such as reducing frying oil prices, bearing the price increase burden of some supply partners, and providing about 10 billion KRW worth of win-win support. However, these efforts are still insufficient to resolve franchisees' difficulties,” adding, “Although the product price increase discussed at this meeting is not an easy decision, we will listen more carefully to franchisees' voices by exploring various measures to increase franchise sales and improve profitability.”

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