As the economic downturn drags on, interest among dining franchises and prospective founders appears to be shifting to unmanned stores and small-format shops. From mid-sized and small franchises to large ones, companies are cutting seats or adopting unmanned systems to reduce rent and labor costs.
According to the industry on the 31st, Paris Baguette will introduce a "hybrid store," the first 24-hour operation in the franchise bakery sector. It completed a pilot at 20 locations starting in Oct. It plans to roll it out nationwide starting next year. During the day, staff will be on site and operate it like a regular store, and during late-night and early morning hours, it will switch to an unmanned system. By minimizing additional operating expenses such as labor costs, it can generate additional revenue, Paris Baguette said.
Starbucks Korea opened five "takeout-focused stores" this year, including the City Hall Station Exit 11 location and the Yeouido IFC Mall Street location. Takeout-focused stores have no seating or minimal seating. About 20 locations are currently operating nationwide. Compared with opening one or two per year, this year saw the most store openings.
Dining franchises are also seeing a surge in demand for ultra-small stores around 330 to 495 square feet. Shinsegae Food's burger brand No Brand Burger introduced a 495-square-foot "compact store" model that can be launched at 60% of the expense of a standard store.
Pizza franchise Papa Johns also unveiled Grab Express, a small specialized store that is 33% smaller than a typical location. Grab Express reduces floor space and cuts the number of essential ovens from two to one to lower startup expense. The Papa Johns Deokso location, which opened late last year, entered the top 25% of Papa Johns' total sales in just two months.
Dining franchise BonIF also built a system at ramen specialist Menji that allows two people to operate an average 330-square-foot small store. Coffee brand Easy Brewing Coffee also opened the Dongtan Mokdong location, a 396-square-foot small store in Hwaseong, Gyeonggi, on the 19th. Gildong Udon is systematizing head office-level support processes and focusing on securing revenue at small stores in B-grade commercial districts.
For corporations and founders, they can cut labor and rent, and in a domestic environment where many start businesses after retirement, it is seen as requiring less energy. On the self-employed community "It Hurts to Be the Boss," one post said, "Small stores or unmanned stores may not become runaway hits, but they require less investment than other startup items and are comfortable because they are less physically demanding."
However, some consumers raised complaints. In unmanned stores, responses can be slow if a kiosk malfunctions, and in small stores, with seating mainly for solo diners or pairs, it is difficult for families to dine out, contributing to an overall reluctance to dine out.
Food service industry officials predicted that while addressing such consumer inconveniences, unmanned and small specialized store models will continue to expand across various sectors. A dining franchise official said, "For now, store downsizing and unmanning are taking place mainly for cafes or foods that are convenient for takeout, but going forward there will be changes across a variety of menus and sectors."