Franchise Headquarters' Sales Growth Rate Over Four Times That of Franchise Stores

Leaders Index by Corporate Analysis Research Institute
Survey of 128 Franchises from 2020 to 2023
Head Office Sales Up 32.3%... Over 4 Times Higher Than Franchisees
Operating Profit Also Surged 77.8%
Industries with Severe Imbalance Between Headquarters and Franchisees: Pizza and Chicken
Baekdabang Bread Lab Ranks First in Average Annual Sales per Franchise
Convenience Store CU Is the Single Brand with the Most Franchise Stores

Over the past three years, the sales revenue of major franchise headquarters in the industry has increased significantly, while the sales of franchise stores have been relatively sluggish.

On the 24th, Leaders Index, a corporate analysis research institute, analyzed the number of franchise stores, average annual sales per store, headquarters sales revenue, and operating profit of 128 franchise headquarters from 2020 to 2023, revealing these results.

On August 8th, at COEX in Gangnam-gu, Seoul, a pizza franchise representative is preparing to operate a booth at the 74th Franchise Startup Expo.
[Image source=Yonhap News]

The number of franchise stores in seven sectors?coffee & beverages, chicken, pizza, convenience stores, bakery, dining, and cosmetics?increased by 11.6%, from 91,239 stores in 2020 to 101,792 stores last year. The average annual sales per franchise store rose by 7.5%, from 287.28 million KRW to 307.1 million KRW.

During this period, the headquarters' sales revenue grew by 32.2%, from 52.9683 trillion KRW to 70.0291 trillion KRW, which is more than four times the growth rate of the average franchise store. Operating profit also surged by 77.8%, from 1.1117 trillion KRW to 1.9763 trillion KRW. Leaders Index explained this as "the impact of retail price increases being transferred to the franchise headquarters rather than individual franchise owners."

The sectors showing pronounced imbalanced growth between franchise headquarters and franchisees were pizza and chicken. The number of pizza franchise stores increased by 15.6%, from 4,025 in 2020 to 4,636 in 2023, but the average annual sales per store decreased by 10.3%, from 359.12 million KRW to 322.03 million KRW. In contrast, headquarters sales revenue increased by 42.1%, from 1.0087 trillion KRW to 1.4332 trillion KRW during the same period.

The chicken sector showed a similar trend. The number of franchise stores rose by 8.5%, from 13,910 in 2020 to 15,093 in 2023. Meanwhile, the average sales per store decreased by 1.6%, from 335 million KRW to 329.69 million KRW, whereas headquarters sales revenue increased by 32.9%, from 2.9315 trillion KRW to 3.8969 trillion KRW.

Only the coffee & beverage sector saw simultaneous growth in both the number of franchise stores and sales revenue. The number of franchise stores under 15 franchise headquarters increased by 27.7% over three years, from 10,230 in 2020 to 13,063 in 2023, showing the highest growth rate. The average annual sales per franchise store rose by 10.3%, from 252.06 million KRW to 277.96 million KRW, and headquarters sales revenue also increased by 47.6%, from 10.3095 trillion KRW to 15.2162 trillion KRW.

Regardless of the sector, the brand with the largest number of franchise stores was the convenience store CU, with 16,615 stores. The highest average annual sales per franchise store was recorded by The Born Korea’s Paik’s Coffee Bread Lab, which was 817.52 million KRW as of last year.

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