Franchise headquarters sales outpace franchisee sales over two years, analysis finds
In short
An analysis of 258 franchise brands in eight sectors found that franchise headquarters' combined sales rose 2.9% over 2023–2025 while average franchisee sales grew just 0.6%, and total franchise outlets fell 0.6% to 116,302. The widest gap was in food service, where headquarters sales rose 4.6% while average franchisee sales fell 2.6%.
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Franchise headquarters in South Korea increased their sales faster than the stores that carry their brands over the past two years, according to an analysis by the corporate research institute Leaders Index released on 6 October and reported by Yonhap and Chosun Ilbo. The institute examined 258 comparable brands across eight sectors — cosmetics, fast food, chicken, food service, convenience stores, bakery, coffee and beverages, and pizza — using data from the Fair Trade Commission's franchise information system and the electronic disclosure system for 2023 to 2025. [ 1 , 4 ]
Total franchise outlets fell 0.6% to 116,302 last year from 117,058 in 2023, and average franchisee sales edged up 0.6% over the two years, from 323.32 million won to 325.38 million won. Headquarters sales across the eight sectors rose 2.9% to 60.7578 trillion won from 59.0348 trillion won, a pace about 4.8 times the franchisee average. [ 1 , 4 ]
Food service showed the widest divergence: headquarters sales rose 4.6% over the two years while average franchisee sales fell 2.6%, a gap of 7.2 percentage points. Convenience stores recorded a 6.6 percentage-point gap, with headquarters sales up 2.8% and average franchisee sales down 3.9%. In bakery, headquarters sales rose 0.7% while franchisee average sales fell 1.9%, and in coffee and beverages headquarters sales rose 0.4% against a 0.5% decline at store level. [ 1 ]
At brand level, Yonhap reported that Myeongnyundang's headquarters sales grew 79.2% to 449.3 billion won, while average sales at its main brand Myeongnyun Jinsa Galbi dropped 22.4% to 730.8 million won; the report notes the company was recently sanctioned by the Fair Trade Commission over a high-interest lending controversy. Sulbing's headquarters sales rose 219.3% to 834 billion won while franchisee average sales fell 3.1% to 437.33 million won. Cosmetics posted the highest headquarters growth, up 28.4% to 375.5 billion won across four brands, while outlet numbers shrank at Tonymoly, Serenique and SkinFood. [ 1 ]
Korea Economic Daily presented the same trend as deepening polarisation between headquarters and store owners, and its feed also carried a separate item on franchise disputes, saying lawsuits over the return of rebate fees are spreading and that the profit margin a low-cost coffee franchise headquarters keeps after costs — reported to range from about 20% to the mid-30% range within the same sector — has been disclosed for the first time. No other document in the set corroborates those figures. [ 3 ]
Why it matters
The data, compiled from Fair Trade Commission and disclosure filings, points to a widening revenue split between franchise headquarters and the store owners who run their outlets, a recurring source of friction in South Korea's franchise sector. It lands alongside separate reports of franchisees pursuing refund lawsuits over rebate fees, though the documents give no indication of any regulatory response to the analysis itself.
Key facts
- Corporate analysis institute Leaders Index analysed 258 brands in eight franchise sectors — cosmetics, fast food, chicken, food service, convenience stores, bakery, coffee and beverages, and pizza — using Fair Trade Commission franchise data and the electronic disclosure system for 2023–2025. [ 1 , 4 ]
- Total franchise outlets fell 0.6% to 116,302 last year from 117,058 in 2023. [ 1 , 4 ]
- Average franchisee sales rose 0.6% over the two years, from 323.32 million won to 325.38 million won, while headquarters' combined sales rose 2.9% to 60.7578 trillion won from 59.0348 trillion won. [ 1 , 4 ]
- The food service sector showed the largest gap: headquarters sales up 4.6% and average franchisee sales down 2.6%, a 7.2 percentage-point difference. [ 1 ]
- Convenience stores showed a 6.6 percentage-point gap, with headquarters sales up 2.8% and average franchisee sales down 3.9%. [ 1 ]
- Leaders Index said Myeongnyundang's headquarters sales rose 79.2% to 449.3 billion won while average sales at its main brand Myeongnyun Jinsa Galbi fell 22.4% to 730.8 million won; the brand was recently sanctioned by the Fair Trade Commission over a high-interest lending controversy. [ 1 ]
- Cosmetics had the highest headquarters sales growth among the sectors, up 28.4% across four brands, while outlet counts fell at Tonymoly (111 to 82), Serenique (17 to 15) and SkinFood (19 to 7); Selbio was unchanged at 13. [ 1 ]
Confirmed by several sources
- Leaders Index released an analysis of 258 comparable franchise brands in eight sectors covering 2023 to 2025, based on Fair Trade Commission franchise information and electronic disclosure data. [ 1 , 4 ]
- Franchise outlet numbers and average franchisee sales were broadly flat over the period while headquarters sales grew faster. [ 1 , 4 ]
- The overall figure cited was a 0.6% rise in average franchisee sales against a 2.9% rise in headquarters sales. [ 1 , 4 ]
Still unclear
- The specific sanctions the Fair Trade Commission imposed on Myeongnyundang over the high-interest lending controversy. Only one document mentions the controversy and it does not describe the sanctions.
- Korea Economic Daily's report that profit margins retained by low-cost coffee franchise headquarters range from about 20% to the mid-30% range, and that rebate-fee refund lawsuits are spreading. This appears in a separate item carried in one outlet's feed and no other document corroborates it.
- Whether the headquarters-versus-franchisee sales gap has continued since last year. The analysis covers 2023 to 2025 and the documents give no later data.