A gap in views over the revenue structure between Baskin-Robbins franchisees and headquarters is fueling conflict. Some owners argue the structure leaves nothing left even when they sell, amid a high cost ratio, year-round discounts, and delivery fees. Headquarters, however, says it is maintaining the industry's highest level of profitability.
On the 26th, the retail industry said tensions are rising between BR Korea, which operates Baskin-Robbins, and the franchisee council. What some franchisees see as the biggest problem is perceived profitability. They say that with labor, materials and supplies prices, and delivery platform expenses all rising at once, while the cost ratio and discount policies remain based on past standards, revenue increased but net profit actually fell.
On the 24th, the Baskin-Robbins franchisee council held a rally in front of SPC Group BR Korea headquarters in Gangnam-gu, Seoul, demanding improvements to the revenue structure. Council chair Cho Cheol-hyeon said, "With a high cost ratio, recurring discount policies, and the added burden of delivery fees, even if sales rise, there is no real profit left."
Some owners also said the supply structure for required primary and secondary materials is a burden. They said they receive certain items, such as the "pink spoon" used when eating ice cream, at prices about twice the market rate, and that year-round, recurring, always-on discount promotions operate on a blanket consent basis, making it hard to forecast store-level expenses in advance.
BR Korea disputes the owners' claims as "different from reality." A BR Korea official said, "Baskin-Robbins franchises maintain the industry's highest level of profitability. For ice cream, the core product, the margin rate (the difference between profit or cost and selling price) is over 50%." The official added, "Headquarters currently covers 50% of delivery sales commissions and surcharge expenses. That is a high level for the industry."
A BR Korea official said, "As of the end of 2025, the number of required items such as pink spoons has been reduced by 58% compared with 2023. Over 75% of all items are recommended without being mandatory," adding, "Supplying required items is a policy to ensure brand quality and uniformity. It is not a structure that shifts expenses onto particular stores."
This divergence is also tied to the recent franchise-wide debate over differential franchise fees. Differential franchise fees refer to profits earned when headquarters supplies primary and secondary materials to owners at prices higher than wholesale. In Korea, it is common to use differential franchise fees as a main revenue source instead of royalties.
In Jan. last year, some Baskin-Robbins franchisees filed a lawsuit against BR Korea to return differential franchise fees. The case is ongoing. The industry notes that the legal standard could diverge depending on past precedents.
The Supreme Court, in a differential franchise fee return case involving Pizza Hut Korea, sided with the owners, finding that differential franchise fees pertain to the essential content of franchise contracts and that collecting them without "explicit agreement with the owners" is hardly permissible. In contrast, in the case of Mom's Touch, in a lawsuit similar to a claim for the return of unjust enrichment over differential franchise fees, the court sided with headquarters, finding that there had been prior explanations and consultation procedures with owners before increasing prices for primary and secondary materials, and that it could be viewed as a management decision based on rising costs and changes in market conditions.
Meanwhile, BR Korea has posted operating losses since 2023. In 2023, revenue was 706.5 billion won with an operating loss of 29 billion won, turning to the red. In 2024, revenue inched up to 712.5 billion won, but the operating loss came to 9.8 billion won, extending the losing streak. With rising materials and supplies prices and higher labor costs, a loss is also likely this year.