Analysis of 258 franchise brands finds fewer outlets and a widening sales gap between franchisors and franchisees

Growth among South Korean franchisors is diverging from sales trends at individual outlets. According to an analysis of 258 brands published by Leaders Index on 6 October 2026, the number of franchised outlets fell between 2023 and 2025, while average sales per outlet remained almost unchanged. Combined franchisor revenue, by contrast, grew relatively quickly. In particular, restaurant and convenience store franchisors recorded revenue growth while average sales at their franchised outlets declined.

Franchise network shrinks by 756 outlets over two years as sales per outlet rise by 0.6%

The analysis covered eight sectors: cosmetics, fast food, fried chicken, restaurants, convenience stores, bakeries, coffee and beverages, and pizza. It examined 258 brands for which comparable figures were available for 2023–2025. Data came from the Korea Fair Trade Commission’s franchise information disclosure system and the electronic corporate disclosure system.

The total number of franchised outlets across the brands analysed fell from 117,058 in 2023 to 116,302 in 2025. That was a decline of 0.6%, or 756 outlets. Over the same period, average sales per franchised outlet rose from KRW 323.32 million to KRW 325.38 million, an increase of KRW 2.06 million, or 0.6%.

Combined franchisor revenue followed a different trajectory. It rose by 2.9%, from KRW 59.0348 trillion in 2023 to KRW 60.7578 trillion in 2025. Based on the growth rates reported in the analysis, franchisor revenue grew roughly 4.8 times as quickly as average sales at franchised outlets.

These findings indicate that the outlet network covered by the study contracted, while sales growth per outlet was limited. However, the net decline in outlet numbers should not be read as the number of closures. It shows the difference in the total number of outlets at two points in time, not how many opened and closed in between.

The figures also represent a group of brands with comparable data. They do not mean that every franchise brand in South Korea experienced the same changes, or that sales at every outlet in the study rose by 0.6%. Overall averages need to be distinguished from the circumstances of individual brands.

Restaurants and convenience stores see franchisor growth and outlet sales move in opposite directions

The restaurant sector recorded the largest gap between franchisor revenue growth and average sales growth at franchised outlets. Restaurant franchisor revenue rose by 4.6% over the two years, while average franchise outlet sales fell by 2.6%, a gap of 7.2 percentage points. Fried chicken and pizza were classified separately from restaurants in this study.

Convenience stores showed a similar divergence. Franchisor revenue increased by 2.8% over the period, while average sales at individual outlets fell by 3.9%. Both sectors demonstrate why rising revenue at franchisor level does not necessarily mean that sales conditions have improved for franchisees.

Bakeries and coffee and beverage businesses also saw different trends at franchisor and outlet level. Bakery franchisor revenue rose by 0.7%, but average franchise outlet sales fell by 1.9%. In coffee and beverages, franchisor revenue increased by 0.4%, while average franchise outlet sales declined by 0.5%. Franchisor revenue growth was modest in both sectors.

Taken together, the sector results reveal differences that the overall 0.6% increase in average franchise outlet sales does not capture. Despite the slight rise in the overall average, sales per outlet fell in restaurants, convenience stores, bakeries, and coffee and beverages. This is why anyone considering a franchise should examine trends in the brand’s sector as well as figures for the wider market.

However, caution is needed when interpreting the size of a sales decline as a ranking of business risk. These sales figures alone do not allow comparisons of cost structures or outlet-level profits across sectors. Identifying the direction of sales is a separate exercise from assessing actual operating returns.

Myungryundang and Sulbing also show gaps between franchisor and outlet performance

Differences were also evident at individual operators and brands. Franchisor revenue at Myungryundang, which operates the Myungryun Jinsa Galbi restaurant brand, rose by 79.2%, from KRW 250.8 billion in 2023 to KRW 449.3 billion in 2025. Over the same period, average sales at Myungryun Jinsa Galbi franchised outlets fell by 22.4%, from KRW 942.35 million to KRW 730.8 million.

Sulbing also saw franchisor revenue and average franchise outlet sales move in opposite directions. Franchisor revenue increased by 219.3%, from KRW 26.1 billion to KRW 83.4 billion, while average franchise outlet sales fell by 3.1%, from KRW 451.16 million to KRW 437.33 million. It is another example of strong franchisor revenue growth not translating directly into higher sales per outlet.

Cosmetics recorded the highest franchisor revenue growth among the sectors studied, at 28.4%. However, the number of physical franchised outlets declined at some brands. TonyMoly’s franchised outlet count fell from 111 to 82, while Skinfood’s dropped from 19 to seven.

When interpreting these figures, it is important to check what is being compared. An operator’s total revenue and average sales at franchised outlets under a particular brand may not cover the same scope of business. The figures show that franchisor revenue rose while outlet sales fell, but that gap alone does not establish that the franchisor took a greater share at franchisees’ expense, or that particular trading terms caused the divergence.

These examples are therefore best read as evidence of a growth gap. Assessing why franchisor revenue increased requires a closer look at revenue sources and the scope of the business. Evaluating an outlet’s performance likewise requires a distinction between the brand average and that outlet’s actual results.

When assessing a franchise, check the basis of comparison before the growth rate

The central message of this analysis for the franchise sector is that franchisor and outlet performance should be assessed separately. Combined franchisor revenue increased, but outlet numbers and average sales per outlet did not move at the same pace. Growth in a franchisor’s overall business is not a reliable substitute for evidence of trading conditions at its franchised outlets.

Prospective franchisees reviewing a brand’s growth figures should first check whether the comparison periods match and whether the figures refer to total franchisor revenue or average sales per outlet. Outlet numbers should also be considered in terms of both the current network size and the change over the same period. The key is not to combine figures measured on different bases into a single growth narrative.

For existing franchisees, average sales are a benchmark, not a substitute for an individual outlet’s profit and loss figures. Even if sales have risen slightly, whether net profit has increased is a separate question. Equally, a fall in average sales does not mean that every outlet’s profitability has deteriorated to the same extent.

In practice, the most direct way to use these statistics is to compare franchisor revenue, average franchise outlet sales and outlet numbers side by side over the same period. Then assess the actual costs and profit and loss figures of the outlet under consideration separately.