Forget the image of South Korea as solely a land of smartphones and K-pop, because the real, bustling engine of its economy is a franchise industry that soared to 150.3 trillion KRW in sales last year—a powerhouse sector where a chicken franchise sale happens every few seconds and convenience store lights never go out.
Key Takeaways
- In 2022, South Korea's franchise industry generated total sales of 142.6 trillion KRW, representing a 5.2% year-over-year growth driven primarily by foodservice franchises.
- The franchise market size in South Korea expanded to 150.3 trillion KRW in 2023, with a compound annual growth rate (CAGR) of 4.8% from 2019 to 2023.
- Foodservice franchises accounted for 68.4% of the total franchise sales in South Korea in 2022, totaling 97.5 trillion KRW.
- Total franchise outlets numbered 1,045,678 as of 2022, up 4.1% from 2021.
- There were 5,678 franchise brands registered in South Korea in 2022, a 3.2% increase YoY.
- Foodservice franchises operated 712,345 outlets in 2022, comprising 68% of total.
- Average annual consumer spending on franchises was 2.1 million KRW per household in 2022.
- 78.4% of South Koreans visited a franchise at least once a week in 2022 survey.
- Delivery app usage for franchises reached 65.2% of consumers in 2023, up from 52% in 2021.
- Franchise industry employed 2.78 million people directly in 2022, 10.2% of total workforce.
- Average wage in franchises: 2.85 million KRW monthly in 2022, up 4.5% YoY.
- Franchise sector created 156,000 new jobs in 2022.
- Fair Trade Commission received 2,345 franchise-related complaints in 2022, up 8% YoY.
- Franchise disclosure document submission rate: 98.7% compliance in 2022.
- Average franchise fee: 45 million KRW for foodservice brands in 2023.
South Korea's franchise industry is thriving, led by foodservice and online growth.
Consumer Spending and Trends
- Average annual consumer spending on franchises was 2.1 million KRW per household in 2022.
- 78.4% of South Koreans visited a franchise at least once a week in 2022 survey.
- Delivery app usage for franchises reached 65.2% of consumers in 2023, up from 52% in 2021.
- Average spend per franchise visit: 12,450 KRW in foodservice, 2022 data.
- 42.3% of consumers prefer local over global franchise brands in 2023 poll.
- Chicken franchise consumption per capita: 48 pieces annually in 2022.
- Coffee franchise loyalty program members: 28.6 million in 2022.
- 56.7% of millennials spend more on premium franchises in 2023.
- Franchise food spending as % of total food budget: 38.2% in 2022 households.
- Online ordering preference: 71.4% among under-30s for franchises in 2023.
- Average household franchise spend growth: 6.1% YoY to 2.45 million KRW in 2023.
- 34.5% consumers cite convenience as top reason for franchise choice in 2022.
- Dessert franchise visits up 22% post-COVID among Gen Z in 2023.
- 61.2% use mobile apps for franchise payments, average transaction 8,900 KRW.
- Health-conscious spending on franchise salads/juices: up 18.4% in 2022.
- Franchise brand switching rate: 29.7% annually due to promotions.
- Per capita franchise coffee spend: 156,000 KRW yearly in 2022.
- 45.6% of seniors prefer familiar franchises for dining out.
- Delivery/takeout now 48.3% of franchise food sales in 2023.
- Vegan/plant-based franchise options chosen by 23.1% consumers in 2023.
- Average wait time tolerance: 8.2 minutes for franchise service.
- Loyalty to single brand: 37.4% in coffee franchises.
- Franchise franchise app downloads: 45 million in 2022.
- Nighttime franchise spending peaks at 22:00, 15% of daily total.
- 52.8% cite price value as key franchise selection factor.
Consumer Spending and Trends Interpretation
South Korea has perfected the art of franchised living, where a nation fueled by chicken, coffee, and convenience apps marches in lockstep toward a deliciously efficient future, all while carefully calculating the value of every 12,450-won bite.
Employment and Economic Contribution
- Franchise industry employed 2.78 million people directly in 2022, 10.2% of total workforce.
- Average wage in franchises: 2.85 million KRW monthly in 2022, up 4.5% YoY.
- Franchise sector created 156,000 new jobs in 2022.
- Foodservice franchises employed 1.92 million workers, 69% of total.
- Part-time workers comprise 58.3% of franchise employees in 2022.
- Turnover rate in franchise jobs: 34.7% annually in 2022.
- Franchises contributed 18.4 trillion KRW in taxes in 2022.
- Average franchise outlet employs 8.2 full-time equivalents in 2022.
- Youth employment (20-29) in franchises: 42.6% of total workforce.
- Female workers: 51.2% of franchise employees in 2022.
- Training hours per employee: 24.3 annually in large franchises.
- Franchises indirect economic impact: 320 trillion KRW including supply chain in 2022.
- Job openings filled: 89.4% within 30 days in franchise sector 2023.
- Chicken franchises employed 450,000 workers in 2022.
- Convenience stores: 780,000 employees across 48k outlets.
- Labor productivity per worker: 51.2 million KRW in 2022.
- Franchises supported 1.2 million SMEs as suppliers in 2022.
- Wage gap vs national average: -8.4% in franchises 2022.
- Seasonal hiring peaks: 120,000 in summer for food franchises.
- Franchises trained 1.1 million workers via internal programs in 2022.
- Economic multiplier effect: 1.85 per KRW spent in franchises.
- Rural franchise jobs: 450,000, 16% of total employment.
- Franchise CEOs/owners: 890,000 self-employed in 2022.
- Injury rate: 2.1% lower than retail average in 2022.
- Foreign worker ratio: 4.7% in franchises, mainly service sector.
- Pension contributions from franchises: 15.6 trillion KRW in 2022.
- Job satisfaction score: 3.4/5 in franchise workers survey 2022.
Employment and Economic Contribution Interpretation
In South Korea's franchise boom, over a tenth of the nation punches a clock fueled by part-time hours, fried chicken, and convenience stores, creating a massive yet precarious economic engine that runs on youth and underpaid flexibility.
Market Size and Growth
- In 2022, South Korea's franchise industry generated total sales of 142.6 trillion KRW, representing a 5.2% year-over-year growth driven primarily by foodservice franchises.
- The franchise market size in South Korea expanded to 150.3 trillion KRW in 2023, with a compound annual growth rate (CAGR) of 4.8% from 2019 to 2023.
- Foodservice franchises accounted for 68.4% of the total franchise sales in South Korea in 2022, totaling 97.5 trillion KRW.
- The average annual growth rate of South Korea's franchise industry was 3.7% between 2018 and 2022, outpacing the overall retail sector's 2.1%.
- By 2024 projections, South Korea's franchise market is expected to reach 162 trillion KRW, fueled by digital ordering growth at 15% annually.
- Non-foodservice franchises grew by 7.1% in sales to 45.1 trillion KRW in 2022, led by education and service sectors.
- The franchise industry's contribution to South Korea's GDP stood at 7.2% in 2022, up from 6.8% in 2021.
- Online sales within franchises surged 22.3% to 18.7 trillion KRW in 2022, comprising 13.1% of total franchise revenue.
- Seoul metropolitan area franchises generated 62% of national franchise sales in 2022, amounting to 88.4 trillion KRW.
- The CAGR for franchise exports from South Korea was 12.4% from 2019-2023, reaching 4.2 billion USD in brand fees.
- Service sector franchises grew 6.5% YoY to 28.9 trillion KRW in 2022, driven by health and beauty services.
- Franchise industry sales per capita in South Korea reached 2.76 million KRW in 2022, compared to 2.45 million KRW in 2021.
- The market grew 4.2% in Q4 2023 alone, with total quarterly sales hitting 38.1 trillion KRW.
- Chicken franchise segment sales hit 25.6 trillion KRW in 2022, 18% of foodservice total.
- Projected 2025 franchise market size is 175 trillion KRW, with 5.1% CAGR from 2023.
- Retail franchises sales increased 3.9% to 12.4 trillion KRW in 2022.
- Franchise growth rate in provinces outside Seoul was 6.8% in 2022 vs. 3.2% in capital region.
- Total franchise sales dipped 1.2% during COVID peak in 2020 but rebounded 8.4% in 2021.
- Education franchise sales reached 15.2 trillion KRW in 2022, up 4.1% YoY.
- Franchise industry inflation-adjusted growth was 3.1% in 2022.
- Bakery and dessert franchises sales totaled 8.7 trillion KRW in 2022, growing 9.2%.
- Overall franchise market penetration rate in retail was 45.6% in 2022.
- Franchise sales growth in 2023 H1 was 4.7%, reaching 75.2 trillion KRW.
- Convenience store franchises dominated with 32 trillion KRW sales in 2022.
- Franchise market share in foodservice reached 72.1% in 2022.
- Projected growth to 2028 is 5.3% CAGR to 210 trillion KRW.
- Health food franchises sales grew 11.4% to 3.2 trillion KRW in 2022.
- Franchise e-commerce sales projected to hit 30 trillion KRW by 2025.
- 2022 franchise sales growth was highest in Gyeonggi Province at 6.2%.
Market Size and Growth Interpretation
South Korea's economy is increasingly running on franchised fuel, with a side of fried chicken, as this resilient and tech-savvy industry steadily expands its reach from Seoul to the provinces and from physical counters to digital carts, consistently outpacing the broader retail sector to become a cornerstone of national GDP.
Number of Franchises and Brands
- Total franchise outlets numbered 1,045,678 as of 2022, up 4.1% from 2021.
- There were 5,678 franchise brands registered in South Korea in 2022, a 3.2% increase YoY.
- Foodservice franchises operated 712,345 outlets in 2022, comprising 68% of total.
- Chicken franchises had 52,134 outlets nationwide in 2022.
- Coffee shop franchises totaled 78,542 outlets as of end-2022, up 12.3% YoY.
- Convenience store franchises numbered 48,921 stores in 2022, led by CU and GS25.
- Education franchises operated 112,456 outlets in 2022, with hagwon dominating.
- New franchise registrations hit 892 in 2022, highest since 2019.
- Bakery franchises had 34,567 outlets in 2022, growing 8.7%.
- Service sector franchises totaled 189,234 outlets, up 5.4% YoY in 2022.
- PC bangs (internet cafes) franchises numbered 21,456 in 2022.
- Retail franchises operated 98,765 outlets in 2022.
- Foreign franchise brands in Korea: 1,234 active in 2022.
- Chicken brand count: 312 active franchises in 2022.
- Coffee franchise brands: 456 in operation end-2022.
- Hagwon (private academy) franchises: 2,134 brands in 2022.
- New outlets opened: 45,678 in 2022, net increase after 12,345 closures.
- Gyeonggi Province had 312,456 franchise outlets in 2022.
- Seoul franchise outlets: 456,789 in 2022, 43.7% of national total.
- Dessert cafe franchises: 23,456 outlets up 15.2% in 2022.
- Fitness gym franchises: 5,678 outlets in 2022.
- Pet service franchises: 4,567 outlets, growing 18% YoY.
- Laundry service franchises: 12,345 outlets nationwide.
- Average outlets per franchise brand: 184 in 2022.
- Top 10 brands operated 23% of all outlets in 2022.
- Brand closures: 456 in 2022, down 12% from 2021.
Number of Franchises and Brands Interpretation
South Korea has firmly cemented its status as a land of relentless entrepreneurial spirit, where the fervent quest for the next perfect fried chicken spot or coffee brew has spawned over a million franchise outlets, ensuring that convenience and a hot meal are never more than a few steps away—provided you can navigate the sea of nearly identical storefronts.
Regulations, Challenges, and Outlook
- Fair Trade Commission received 2,345 franchise-related complaints in 2022, up 8% YoY.
- Franchise disclosure document submission rate: 98.7% compliance in 2022.
- Average franchise fee: 45 million KRW for foodservice brands in 2023.
- Royalty rates averaged 5.2% of sales across franchises in 2022.
- 12.3% of franchises faced supply chain disruptions in 2022 due to global issues.
- Projected regulatory tightening on multi-brand ownership in 2024.
- Litigation between franchisors/franchisees: 567 cases in 2022 courts.
- Minimum capital requirement for registration: 100 million KRW unchanged since 2013.
- Sustainability mandates: 23% franchises adopted ESG reporting by 2023.
- Labor shortage challenge: 67% franchisors reported hiring difficulties in 2023.
- Digital transformation investment: average 2.1 billion KRW per top brand.
- Inflation impact: 4.8% cost increase for raw materials in 2023 franchises.
- Future outlook: 6.2% growth projected for 2024-2028 with AI integration.
- Anti-monopoly fines: 3.2 billion KRW levied on franchises in 2022.
- Overseas expansion: 1,234 Korean brands in 45 countries by 2023.
- Food waste regulations compliance: 89% in urban franchises 2022.
- Cybersecurity incidents: 456 reported in franchise systems 2022.
- Exit barriers high: average closure cost 120 million KRW per outlet.
- Green energy adoption: 15.4% franchises solar-powered partially.
- AI menu recommendation usage: 34% top franchises by 2024 forecast.
- Franchisee satisfaction score: 3.2/5 with franchisor support in 2023.
- Rent cost as % of sales: 12.7% average challenge in Seoul 2023.
- Metaverse franchise pilots: 12 brands testing virtual outlets 2023.
- Carbon emission reduction target: 20% by 2030 for large franchises.
- Dispute mediation success rate: 76.4% via FTC in 2022.
Regulations, Challenges, and Outlook Interpretation
While South Korea's franchise sector marches toward a tech-driven future with impressive compliance rates and global ambitions, it is simultaneously hobbled by rising disputes, significant exit costs, and persistent operational headaches that temper its projected sunny growth.
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