Headquarters Profit While Franchisees Struggle... Franchise Sales Gap Widens

Leaders Index Analyzes Three Years of Franchise Sales
Headquarters Sales Up 11%, Franchise Store Sales Down 7.6%

While the sales of major domestic franchise headquarters have increased by double digits over the past three years, the average sales of franchise stores have decreased by about 7%.

On October 10, Leaders Index, a corporate analysis research institute, compared and analyzed the sales data for three years of franchise headquarters and stores in seven industries-coffee, chicken, pizza, convenience stores, bakery, food service, and cosmetics-using data from the Fair Trade Commission's Franchise Business Information System and the Electronic Disclosure System. The analysis found that the sales of major domestic franchise headquarters increased by 10.8% during this period, while the average sales of franchise stores decreased by 7.6%.

This study analyzed the annual average sales per store, headquarters sales, and operating profits of 92,885 franchise stores belonging to 115 franchise headquarters that could be compared from 2022, when the COVID-19 pandemic ended, to last year.

Pizza image.

The survey found that the number of franchise stores in the seven major domestic industries increased by 6.6%, from 87,108 in 2022 to 92,885 last year. The annual average sales per franchise store decreased by 7.6%, from 327.23 million won to 302.48 million won.

During this period, the sales of franchise headquarters increased by 10.8%, from 43.1565 trillion won to 47.7963 trillion won. Their operating profits also surged by 8.1%, from 1.1697 trillion won to 1.2642 trillion won.

The industry with the most severe imbalance in growth between franchise headquarters and store owners was pizza. The sales of the seven pizza franchise headquarters increased by 66.5%, from 418.9 billion won in 2022 to 1.1193 trillion won in 2024, while the average sales per store under these headquarters decreased by 11.9%, from 353.81 million won to 311.63 million won. The gap in sales growth rates between headquarters and stores widened by 78.4 percentage points. During this period, the number of pizza franchise stores increased by 7.9%, from 1,757 to 1,895.

The food service industry showed the next most significant imbalance in sales growth. The sales of 54 food service franchise headquarters increased by 29.7%, from 2.6801 trillion won to 3.4751 trillion won in 2024, while the average sales per store decreased by 16.4%, from 405.35 million won to 338.95 million won. The difference in sales growth rates between headquarters and stores was 46.0 percentage points. During this period, the number of food service franchise stores increased by 4.7%, from 6,881 to 7,201.

In the bakery sector, the number of franchise stores belonging to eight headquarters increased by 5.0%, from 6,022 to 6,324, while the average sales per store decreased by 18.7%, from 435.09 million won to 353.80 million won. In contrast, the sales of these headquarters increased by 8.2%, from 7.2318 trillion won to 7.8223 trillion won, widening the difference in growth rates to 26.8 percentage points.

Since the pandemic, coffee and beverage was the only sector in which both the number of franchise stores and sales grew simultaneously. The number of franchise stores under 17 headquarters increased by 19.2% over three years, from 9,661 to 11,513, marking the highest growth rate. The annual average sales per store also rose by 14.1%, from 221.15 million won to 252.37 million won. Headquarters sales increased by 33.4%, from 2.9563 trillion won to 3.9447 trillion won, and operating profits soared by 81.1%, from 147.3 billion won to 254.8 billion won.

Meanwhile, regardless of industry, convenience stores had the highest number of franchise stores under a single brand, with 55,331 stores, a 5.4% increase from 52,511 in 2022. Among them, CU had the largest number with 18,458 stores. The franchise store with the highest annual average sales per store was Maeranbang of Tasty Korea, which recorded 1.1468 billion won last year.