BBQ, bhc, and Kyochon Chicken, among other major chicken franchise companies in the country, are accelerating their overseas strategies. This is because the domestic market has reached saturation with over 700 brands.
◇ Saturated domestic chicken franchise market
According to relevant industry sources on the 20th, the domestic chicken industry entered a downward trend after peaking in brand and store count two to three years ago. According to the 'Franchise Business Status Statistics' released by the Fair Trade Commission last year, the number of domestic chicken brands was counted at 669 as of 2023. This marks an approximately 2% annual decline from 701 in 2021 and 683 in 2022.
Sales in the chicken industry are also on the decline. The average sales of franchise owners from the three chicken franchises, including BBQ, bhc, and Kyochon, have decreased, excluding BBQ. According to the information disclosure documents released by each company, the average sales of Kyochon Chicken franchise owners fell from 753.72 million won in 2021 to 694.3 million won in 2023, a decrease of 7.9%. BHC Chicken saw a decline from 632.53 million won in 2021 to 546.73 million won last year, a drop of 13.6%. However, the average sales for BBQ franchise owners increased by 15%, from 432 million won in 2021 to 496.84 million won in 2023.
With the domestic market being saturated, it is not easy for chicken franchises to open additional stores. Consequently, large chicken franchises have targeted overseas markets since the early 2000s. Particularly in the last two to three years, they have been expanding their overseas presence.
Yoon Hong-geun, chairman of Genesis BBQ, has set a goal to reach 50,000 stores worldwide by 2030. Currently, BBQ operates over 700 stores (excluding Korea) in 57 countries, with a particular focus on North America. The company has established over 250 stores in New Jersey, New York, California, Texas, and Hawaii, and opened its first store in Oregon this month, expanding its footprint to 31 states across the country. Additionally, BBQ has entered Southeast Asia, including Vietnam and the Philippines, as well as countries in Central America such as Panama and the Bahamas.
As of the end of last year, Kyochon operates 84 stores in seven overseas countries, including Taiwan and Indonesia. On the 18th, it opened its first store in Shenzhen, China. Shenzhen is recognized as one of the four major cities in China along with Beijing, Shanghai, and Guangzhou. Due to the presence of global information technology (IT) and manufacturing corporations like Huawei and Tencent, it is referred to as 'China's Silicon Valley.' A Kyochon representative noted, "Shenzhen is one of the cities with the highest economic growth rates in China, and it is a key market where young, high-income individuals are concentrated," adding, "We aim to solidify our position in the Greater China market and enhance our global presence."
BHC opened its first overseas store in Hong Kong in 2018. Since then, it has expanded to the United States, Canada, Thailand, and has recorded a total of 10 overseas stores in 2023. Last year, that number increased to 27. This year, the goal is to expand the number of overseas countries to 10, including the Philippines and Japan.
◇ "Initial investment needed... it takes more time to profit overseas"
Analysts indicate that more time will be required for the global operations of the three chicken franchises to secure profitability. Each company does not disclose specific overseas sales or operating profits. BBQ, which began its global expansion early, only started generating operating profits in the U.S. region in 2022. According to BBQ, global revenue was approximately 300 billion won last year.
In Kyochon’s case, the global business accounts for only 4% of total revenue. According to the Financial Supervisory Service’s electronic disclosure system, Kyochon’s annual revenue for 2023 was 445 billion won, of which domestic franchise revenue was 413.8 billion won, and global revenue was 17.8 billion won. The global revenue for 2023 increased by 1.7% from the previous year (17.5 billion won). BHC's overseas revenue was 2 billion won, marking a 193% increase compared to the previous year, but the scale remains insignificant.
An industry insider stated, "Investment is also needed to build infrastructure such as logistics, and because there are trial and error experiences, it will take several more years to generate profits."