Executive director Lee Moon-gyu of Tudari's chain business division met with ChosunBiz on Nov. 19 and explained the background of Tudari's store renewal this way. Starting in 2021 with the opening of stores applying a new interior model, Tudari has been rolling out policies to support renovation of older outlets since 2023. As of now, the new interior model has been applied to about 250 of the 1,300 stores nationwide.
Tudari is a brand that began when founder Chairman Kim Jin-hak, who passed away in Oct., 1987, opened a small skewer shop near Jemulpo Station in Incheon. The headquarters name is "Ewon." In 1989, the company established a Tudari-only plant in Seosan, South Chungcheong, creating a production and distribution system to supply ingredients of consistent quality to stores nationwide.
Lee said the plan is to break away from the old tavern image that has lasted about 40 years and expand the category into a dining space where families can come together through renewal and a broader menu. Lee said, "We have long debated whether Tudari belongs more in the tavern category or the restaurant category," adding, "We are not outright denying the years we kept the tavern image, but we are trying to break out of that mold, attract more customers, and grow."
With the restaurant industry struggling amid an economic downturn, a differentiation strategy is needed. Tudari operates a dedicated research and development (R&D) team focused on developing differentiated menu items. Lee said, "Every year we develop new menu items and first sell them on a trial basis at the store on the first floor of headquarters. If the response is good, we sell them at each franchise," adding, "There was a time when we were proud that Tudari's menu led trends. As back then, we are setting standards and pursuing menu development to create differentiation with proprietary items."
By directly operating a plant to produce products in-house, the company expanded its business into B2B (business-to-business) and B2C (business-to-consumer), distributing to big-box retailers and pushing delivery operations.
In Dec. last year, the company selected comedian Lee Su-ji as an advertising model and began promotions to boost brand awareness among customers in their 20s and 30s. Lee said, "Since Lee Su-ji became our advertising model, the age of prospective franchise owners interested in launching has been trending younger," adding, "We are indirectly feeling the ad's impact, as we are hearing evaluations like 'I saw the Lee Su-ji ad' and 'It feels friendly,' with a changing perception of Tudari." The following is a Q&A.
— What is the core brand philosophy Tudari has maintained since its founding in 1987?
"What I want to emphasize is co-prosperity. Without stores, there is no headquarters. We wanted to avoid having franchises be controlled by corporations. The reason we had not done advertising and publicity until now was to save that expense and instead revisit each store one more time."
— What can Tudari offer prospective owners?
"The greatest advantage is the trust the brand conveys. Recently, there are many trendy taverns, and many people choose related businesses. But if you ask whether those outlets can be operated for more than five or 10 years, the answer will likely be that it's not easy. Tudari's average store operation period is longer than other franchises. If you want to run a store for a long time, I'm confident there's nothing like Tudari. It's not necessarily wrong to run a business for only one or two years and profit through a key money premium, but that would not fit Tudari."
— There is criticism in some quarters that after founder Kim Jin-hak passed away, you began promotions because you intend to sell the company, given that you had not done advertising and publicity previously.
"It's the opposite. We started advertising and publicity to show our commitment to carrying on the corporate values and brand philosophy the founder maintained for 40 years. We are not considering a sale at all."
— Competition in the restaurant franchise market is fierce. What sets Tudari apart?
"I think our strength is handling a wide range of menu items. We offer a variety of Korean-, Japanese-, and Chinese-style anju, as well as dried snacks. Even when a group visits, the lineup is such that each person can find at least one thing they want to eat."
— What advantages are there in directly operating a manufacturing plant?
"Because we manufacture directly at the plant and handle distribution, even small stores can sell 50 menu items. We deliver directly to each store every other day, making inventory management easy, and we package items in one-pack portions, so cooking is simple. It also makes it easier to expand into B2B by supplying other corporations."
— Do you have plans related to delivery operations?
"Tudari also suffered a heavy blow during the COVID-19 pandemic. To survive, we first introduced delivery then, and we tried various things such as serving lunch at stores in office districts. Currently, the delivery business has seen some success, and we aim to scale up delivery operations next year and the year after. We will not deliver the entire menu but will select delivery-specialized items. We plan to choose items that are difficult for existing late-night snack shops and chicken shops to deliver, to create differentiation."
— You have succeeded in expanding overseas to China and Thailand. Do you have plans to enter other countries?
"We have signed a master franchise agreement in Canada and aim to open six stores in Vancouver within three years. If we hit milestones in Vancouver, we will first move into Toronto and then target the United States. We also aim to expand our retail business by producing ingredients locally overseas. Through business trips, we will identify products that can be produced locally and present more Tudari products in overseas markets as a realistic goal."
— How would you like consumers to remember the Tudari brand?
"When we ask customers who come to Tudari what they like, many answer that it's an unpretentious, easygoing place where they can meet friends. We want to keep that message. Even at stores with the new interior, the tone has gotten much brighter, but that doesn't make Tudari a restaurant. We will keep menu prices as much as possible to maintain the image of a comfortable space."