According to the ‘2024 Seoul Franchise Business Registration Status’ announced by the Seoul Metropolitan Government on the 1st, the number of franchise locations in Seoul at the end of last year was 205,164, an increase of 4.9% from the previous year. However, the number of franchisors and brands slightly decreased to 2,754 and 4,403, respectively.
This decrease is analyzed to be influenced by the cancellation of registrations of ‘ghost brands’ without actual franchise locations. To enhance the effectiveness of franchise businesses, Seoul is implementing the cancellation of registrations for brands that do not regularly update their information, thereby organizing the market. It was confirmed that 71% of the 541 brands canceled in 2023 had no franchise locations at all.
The food service industry continues to hold a dominant share in the overall franchise market. Food service brands accounted for 3,349, or 76.1% of the total, while franchise locations numbered 86,931, representing 42.4% of the total. The increase in the number of franchises in the Korean food (14.8%↑) and coffee sectors (10.4%↑) is particularly notable, though the number of brands slightly decreased.
In the service sector, the ‘large franchise taxi’ brand led the market, with the number of franchises increasing by a staggering 144% compared to the previous year. In the wholesale and retail sector, franchise locations increased centered around major convenience stores, while the cosmetics sector continued to decline.
The average annual sales of all franchise locations in Seoul recorded a stable growth of 6.0%, reaching 394 million KRW. Among the sectors, the service industry saw the largest increase of 13.6%, followed by the food service industry with 5.9% and the wholesale and retail industry with 3.1%.
The number of brands with average annual sales exceeding 300 million KRW increased by 155 to 839, with the food service industry comprising 669, or 79.7%, maintaining its strength. The average start-up cost was 113 million KRW, with interior costs taking up the largest share (45.6%) at 51.5 million KRW.
To reduce start-up costs, Seoul is strengthening inspections on the ‘Seoul Franchise Business Essential Items Guideline’. By limiting the designation of unnecessary items as essential, they have guided 367 general products to be changed to recommended items in the recent review of 116 brands.
Institutional measures are also in place to prevent and resolve disputes. Through the ‘Franchise Business Transaction Dispute Mediation Committee’ and the ‘Fair Trade Comprehensive Counseling Center’, franchise owners can apply for legal advice and dispute mediation.
Kim Myung-seon, head of the Seoul Fair Economy Division, stated, “The simultaneous increase in the number of franchise locations and sales is a positive sign that the franchise industry in Seoul is becoming more substantial,” and added, “We will create a trustworthy market environment for both entrepreneurs and store owners through effective policies such as strengthening information disclosure, pre-start-up consultation, and dispute mediation.”
The Seoul Metropolitan Government has posted this registration status data on their website, while detailed information for each brand can be found on the Fair Trade Commission’s franchise business transaction website.