2835→1088→6.56 Million Won... "Yeondon Bolkatsu Sales Decrease 'Unusually'"

The number of stores and sales of Yeondon Bolkatsu, a brand under The Born Korea, have reportedly been halved. This is considered an unusual phenomenon in the franchise industry.

According to the Yeondon Bolkatsu disclosure document registered with the Fair Trade Commission on the 28th and The Born Korea, Yeondon Bolkatsu opened four franchise stores after its application on August 20, 2021.

Yeondon Pork Cutlet Signboard.
Photo by Yonhap News

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The number of franchise stores increased to 68 in 2022 but decreased to 49 by the end of last year, and as of the 26th of this month, it stood at 31.

The average annual sales per Yeondon Bolkatsu franchise store dropped by about 40%, from 259.76 million KRW in 2022 to 156.994 million KRW last year. The average monthly sales are around 13 million KRW.

A franchisee stated in an interview with Yonhap News Agency that after deducting rent and utility bills, "there is almost nothing left."

He claimed, "If you keep 15% of most sales, it is considered profitable, but the average is about 10%. A business that only makes 1.3 million KRW a month is a failure."

In some locations, sales have been halved. The hall sales of eight stores belonging to the Yeondon Bolkatsu Franchisee Association all peaked immediately after opening and dropped to half within two months.

The sales of Store A, which opened in Seoul in May 2022, recorded 45.02 million KRW in June but dropped to 20.43 million KRW from July.

Subsequent monthly sales were 15.67 million KRW in August, 9.47 million KRW in September, 10.66 million KRW in October, 9.03 million KRW in November, and 7.68 million KRW in December.

Store B, which opened around the same time in Gyeonggi Province, also saw monthly sales decrease from 28.35 million KRW in May to 12.55 million KRW in July, 10.88 million KRW in August, and down to 6.56 million KRW in December.

Store C in Busan saw monthly sales drop from 29.16 million KRW in September 2022, right after opening, to 16.39 million KRW in October and 10.27 million KRW in December.

Store owners expressed that The Born Korea's management was insufficient. The owner of Store A said, "In the early days of business, customers often complained that the food was too salty, and we requested improvements, but the recipe was only revised about a year later."

The owner of Store C in Busan pointed out, "We requested advertising support because Bolkatsu's brand awareness was low, but it was not granted. While there were meetings with franchisees in Seoul and Gyeonggi regions regarding sales decline, new franchises were opened in Busan and Gyeongnam without clear countermeasures."

In the franchise industry, the sharp decline in Yeondon Bolkatsu's sales is considered unusual. Except for trendy businesses like Tanghulu, it is rare for sales to drop by 40% within a few months. Especially, meat-related businesses are known to have relatively stable sales.

The Born Korea explained the sales decline by saying, "After the opening effect leads to good sales, maintaining them requires joint efforts from both the headquarters and franchisees. While some stores may see declines, others are increasing."

They also emphasized that there was no promise regarding sales figures or profit margins.

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