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The price of a whole chicken has soared well beyond 15,000 to 20,000 KRW. During the unprecedented infectious disease outbreak that froze the dining-out market nationwide, demand for delivery services surged explosively. This boom fueled the simultaneous growth of both delivery platforms and the chicken franchise market. As social distancing made home-cooked meals and delivery orders a part of daily life, chicken became not just a “national snack” but the leading delivery menu. While the pandemic threatened the survival of self-employed business owners, the chicken industry enjoyed a boom.

However, not everyone benefited from this growth. Although the market expanded and prices rose, profits became concentrated not with consumers or store owners, but with delivery platforms and franchise headquarters. Delivery platforms nearly doubled their operating profits by revising their commission and advertising systems, while headquarters increased their profit margins by raising supply prices under the pretext of “rising costs.”

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According to the Financial Supervisory Service and the food service industry, the surge in delivery demand has led to rapid growth in the delivery platform industry.

Baedal Minjok (Woowa Brothers) had sales of 1.0994 trillion KRW and an operating loss of 11.2 billion KRW in 2020, but within two years, sales increased to 2.9471 trillion KRW and operating profit turned positive at 424 billion KRW.

In 2023, it recorded sales of 3.4155 trillion KRW and an operating profit of 699.8 billion KRW (operating profit margin of 20.5%).

Last year, sales soared to 4.3226 trillion KRW, with the intermediary commerce sector alone reaching 3.5598 trillion KRW, a 30.9% increase.

In the same year, Baemin raised its intermediary commission by 3 percentage points.

Coupang Eats has not disclosed its performance, but it is understood to have surpassed Baemin's market share in Seoul and the metropolitan area.

The delivery platform market has solidified into a duopoly between Baedal Minjok and Coupang Eats. According to Mobile Index, Baedal Minjok’s monthly active users (MAU) increased from 22.56 million in 2023 to 23.06 million as of August this year. During the same period, Coupang Eats’ MAU nearly tripled from 4.38 million to 11.74 million. Together, these two platforms now account for over 90% of the market share.

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Delivery platforms have become both the growth driver and a source of cost pressure for the chicken franchise industry. While they played a key role in expanding the market, they have also been cited as a cause of declining profits for store owners. The chicken franchise market, which was worth 5.3 trillion KRW in 2019, grew by 54% during the pandemic to reach 8.2 trillion KRW in 2023. Over the same period, the number of franchise stores increased by 15%, from 25,687 to 29,727.

According to a survey by the Korea Rural Economic Institute, the proportion of households using delivery or takeout services rose from 36.9% in 2021 to 45.8% last year. On average, households spent 93,000 KRW per month on delivery and takeout food. Among delivery menu items, chicken ranked first in usage at 30.7%, followed by bossam and jokbal (19.7%), pizza and pasta (14.6%), and Chinese cuisine (13.3%).

However, behind the expansion of the franchise market, the lives of store owners have become more challenging. According to franchise disclosure documents released by the Fair Trade Commission, the average sales per 3.3 square meters for BHC dropped by 15.9%, from 31.86 million KRW in 2021 to 26.8 million KRW last year. During the same period, Kyochon Chicken also saw a 5.8% decrease from 35.1 million KRW to 33.06 million KRW. BBQ’s figure slightly decreased from 32.6 million KRW in 2023 to 32.41 million KRW last year.

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The closure rate has also risen. The closure rate for chicken restaurants increased from 11.9% in 2020 to 12.1% in 2023. For Kyochon Chicken, the number of closed stores jumped more than threefold from 9 in the previous year to 28 last year.

Store owners unanimously say they “have no choice.” This is because factors like store exposure and delivery fees are entirely dictated by platform policies. Considering advertising costs (200-600 KRW per click), intermediary commissions (6-9%), payment processing fees (3%), and delivery fees (3,000-4,000 KRW per order), industry sources explain that the net profit per chicken for store owners is only around 2,000 KRW. This is why some say, “Delivery apps are a black hole sucking up local businesses.”

Another major beneficiary is the franchise headquarters. The prices of signature menu items from the three main companies-BHC, Kyochon, and BBQ-have risen by 27-46% compared to 2021. BHC’s “Fried Chicken” increased by 46.6%, from 15,000 KRW to 22,000 KRW. Kyochon’s “Honey Combo” jumped 38.8%, from 18,000 KRW to 25,000 KRW (based on delivery app prices). BBQ’s “Golden Olive Chicken” rose by 27.7%, from 18,000 KRW to 23,000 KRW. These increases are more than double the consumer price inflation rate (about 12%).

BBQ (Genesis BBQ) saw its sales increase by 38%, from 366.2 billion KRW in 2021 to 506.1 billion KRW last year. Operating profit also rose by 31%, from 65.3 billion KRW to 85.6 billion KRW. Its gross profit margin improved from 39.5% to 40.8%. BHC (Dining Brands Group) increased its sales from 477 billion KRW to 512.7 billion KRW, and Kyochon Chicken (Kyochon F&B) saw its gross profit margin rise from 21.8% to 30.2%.

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Headquarters explain that these increases are “unavoidable due to the rising cost of raw materials.” In fact, in 2022, BBQ raised the supply prices for 39 items, including fresh chicken and olive oil. The price of chicken per bird rose by 9%, from 5,500 KRW to 6,000 KRW, and olive oil (per 15kg container) increased by 33%, from 120,000 KRW to 160,000 KRW. That same year, BHC also adjusted its oil supply price from 82,500 KRW to 121,050 KRW.

However, industry insiders point out that this is not simply a matter of rising costs, but rather a structural expansion of profit margins. One industry official stated, “The oil supplied by headquarters accounts for half of the total margin. Each store uses 30 to 40 containers per month, and with a 40,000 KRW increase per container, that’s an extra 1.2 million KRW per month and 14 million KRW per year.” This analysis suggests that raising supply prices has become a means for headquarters to expand their profits.

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According to the Fair Trade Commission, the average differential franchise fee in the chicken sector was 35 million KRW in 2023, the highest among all sectors. The differential franchise fee refers to the margin between the actual cost and the supply price of raw and subsidiary materials provided by headquarters to franchisees. This margin accounts for 8.6% of the average sales per franchise store. In other words, a significant portion of the 20,000 KRW paid by consumers flows directly to headquarters.

Experts warn that such a structure could undermine the foundation of the franchise industry. Lim Youngkyun, Professor Emeritus at Kwangwoon University, noted, “The spread of delivery platforms is disrupting the balance of the franchise system. Franchise headquarters need to play the role of mediator between store owners and platforms.”

However, in reality, headquarters still act more as bystanders. Although some brands have introduced a “dual pricing system” (setting different prices for in-store and delivery app orders), it has not been properly implemented due to consumer backlash and concern over platform reactions. Professor Lim stressed, “If headquarters cannot protect the survival of store owners, the franchise system itself could collapse. Now is the time to strengthen the role of negotiator and coordinator at the system level.”