Franchise outlet sales drop 5.5% in 2020 due to pandemic
Sales at franchise outlets in South Korea fell 5.5% year-on-year in 2020 due to fallout from the COVID-19 pandemic, driven by a slump in restaurant brand sales, it said on Tuesday. the company’s watchdog.
Sales at franchise outlets averaged 311 million won ($254,400) in 2020, up from 329 million won the previous year, according to the Fair Trade Commission.
Average restaurant franchise brand sales fell 9% year on year to 283 million won.
Service providers, including educational institutes and beauty salons, reported a 2.3% drop in sales to 128 million won. The average income of wholesale and retail operators fell 4.1% to 534 million won.
In-person services, such as restaurants and accommodation, have been hit hard by the COVID-19 pandemic, with people refraining from visiting stores for fear of infection.
The FTC said chicken franchise revenue rose 8.4% year-on-year to an average of 285 million won thanks to the popularity of food delivery apps. But sales at Korean restaurants and cafe franchises saw their average sales drop 18.1% and 15.1%, respectively.
Cosmetics outlets reported a 41 percent drop in sales to 230 million won on average due to increased online sales of beauty products, he added.
Despite the pandemic, the number of franchised brands has increased largely due to stricter franchise registration rules.
The number of franchised brands jumped 58.1% year-on-year to 11,218 at the end of 2021. It was the first time the tally exceeded 10,000.
The number of franchise outlets stood at 270,485 at the end of 2020, the latest available figure, up 4.5% from a year earlier, the data showed. (Yonhap)