Budget coffee advertising spend surges: Mega MGC Coffee reaches KRW 32.3 billion, but outlet sales diverge

The gap between rising advertising investment and franchise outlet performance is attracting attention in South Korea’s budget coffee franchise community. Major brands all increased their advertising spending in 2025, but average sales per outlet and sales per unit of floor space did not move in the same direction. As competition through celebrity-led marketing continues, the figures highlight the need to examine not just advertising budgets, but also cost-sharing arrangements and individual outlet performance.

Mega MGC Coffee, Compose Coffee and The Venti increase advertising spending

According to figures drawn from Korea Fair Trade Commission franchise disclosure documents and audited financial statements, reported on 10 November 2026, Mega MGC Coffee recorded advertising expenditure of KRW 32.28404 billion in its franchise disclosure document for 2025. This was a 71.3% increase on the previous year. Spending rose from approximately KRW 12.5 billion in 2023 to KRW 18.8 billion in 2024, before increasing sharply again in 2025.

Mega MGC Coffee has the largest outlet network among South Korea’s budget coffee brands. Its sustained increase in advertising spending points to continued investment in brand visibility rather than a one-off rise. However, the total budget alone does not reveal the benefits to individual outlets or how much franchisees actually paid towards it.

Compose Coffee, whose outlet count exceeded 3,000 in 2025, also increased advertising expenditure. Advertising and promotion expenses in its audited financial statements totalled KRW 10.07869 billion, up 30.1% year on year. Advertising spending grew alongside the outlet network, but the simultaneous increases do not establish how much advertising contributed to new openings or sales growth.

The Venti, which has approximately 1,300 outlets nationwide, reported advertising expenditure of KRW 10.3 billion in its franchise disclosure document for 2025. This represented a 168% increase on the previous year and roughly ten times the 2023 figure. Rising expenditure at The Venti, as well as Mega MGC Coffee and Compose Coffee, illustrates the scale of marketing competition among budget coffee brands.

Although all three brands increased spending, percentage growth and absolute expenditure must be considered separately. A high growth rate means spending rose rapidly from the previous year, not necessarily that the brand spent the most. When comparing brands with different starting points, both the amount spent and the rate of change matter.

Theborn Korea’s figures are not advertising spending for Paik’s Coffee alone

Theborn Korea, which operates Paik’s Coffee, increased its total advertising expenditure from approximately KRW 3.9 billion in 2024 to KRW 5.9 billion in 2025. Mammoth Express also increased advertising spending over the same period, from around KRW 800 million to KRW 2.8 billion. The figures show a broader trend towards higher advertising expenditure among companies operating budget coffee brands.

There is, however, an important difference in the scope of these figures. Theborn Korea’s total covers the whole company, not just Paik’s Coffee. Placing it alongside other coffee brands’ advertising figures and treating it as Paik’s Coffee expenditure would create a misleading comparison. This distinction must also be made clear when considering the figures alongside sales at Paik’s Coffee outlets.

The reporting categories are not identical either. Mega MGC Coffee and The Venti provided advertising expenditure figures in franchise disclosure documents, while Compose Coffee reported advertising and promotion expenses in audited financial statements. It would therefore be inappropriate simply to add these figures together or divide them by outlet numbers to present a cost per franchisee. The scope of the expenses and the actual cost-sharing arrangements need to be checked separately.

In particular, total brand advertising expenditure is not the same as advertising contributions paid by franchisees. Higher spending could lead to higher franchisee contributions, but the totals provided do not establish how much extra any individual franchisee paid. The increase in expenditure and the question of who funded it must be treated separately.

Franchise outlet sales diverge despite higher advertising spending

Mega MGC Coffee’s average sales per franchise outlet reached KRW 412.87 million in 2025, up 6.3% year on year. Average sales per pyeong — a Korean unit of floor area equivalent to approximately 3.3 square metres — also rose by 5.7%. Both average sales per outlet and sales per unit of floor space increased. Higher advertising expenditure and sales growth were observed over the same period.

By contrast, Paik’s Coffee recorded a 9.1% decline in average sales per franchise outlet and a 9.9% fall in average sales per pyeong. Its franchise sales indicators fell during a period when Theborn Korea’s overall advertising expenditure increased. However, this compares company-wide advertising spending with sales at a particular brand, so it should not be interpreted directly as evidence of the success or failure of Paik’s Coffee advertising.

At The Venti and Mammoth Express, the two sales indicators moved in different directions. Average sales per franchise outlet rose slightly year on year, but average sales per pyeong fell by 1.5% and 3.8% respectively. Sales per outlet suggest growth, while sales relative to floor space tell a different story. This illustrates why prospective franchisees should not assess operating performance using a single average.

These results show that increased advertising spending did not coincide with the same sales trend at every brand. They do not, however, prove that higher advertising expenditure directly caused the changes in sales. When examining each brand’s figures, it is useful to consider whether advertising expenditure and sales moved together, without assuming a cause-and-effect relationship.

Average sales per franchise outlet do not guarantee the performance of an individual shop, nor do sales equate to a franchisee’s net profit. These figures establish changes in average sales by brand. Without separate cost data, they cannot show how much franchisee profit changed following the increase in advertising spending.

Franchisees need clarity on cost-sharing and performance, not just budgets

The practical questions raised by these figures are clear for South Korea’s budget coffee franchise community. Beyond the scale of advertising campaigns, franchisees need to understand how costs are allocated and how outlet performance is assessed. Celebrity endorsements and large campaigns alone are not a sound basis for expecting higher profits at an individual outlet; actual costs and sales need to be examined together.

Existing franchisees should review their advertising-related contributions alongside changes in their outlet’s sales over the same period. Questions for the franchisor are best separated into three areas: total advertising expenditure, which costs franchisees are expected to share, and the basis on which those costs are allocated. This is not about dismissing or guaranteeing advertising effectiveness in advance, but about assessing costs and results on a consistent basis.

Prospective franchisees should consider both average sales per outlet and average sales per pyeong. If the indicators move in different directions, that is a reason to scrutinise the proposed outlet’s floor area and cost projections more closely. During discussions with the franchisor, they should also establish whether figures cover the whole company or a specific brand, and which year they relate to.

The practical takeaway is straightforward: do not assume that higher advertising spending means higher outlet profits. Check the contractual cost-sharing arrangements alongside the performance of your own outlet.