Korea Food Service Franchising

The Korean food service franchise market is a difficult to enter, as it is saturated with many players.  A comparison of the Japanese and Korean franchisee market highlights that in 2017 Japan had 1,339 franchise companies present while Korea had 4,621 companies, 3.5 times as many franchise companies in Korea than in Japan, when the population of Korea was only a half of Japan.

The Korean franchising industry is known for high competition with low survival rate, and there is limited room for expansion throughout Korea. However, there have always been foreign food service brands that successfully enter the Korean market.  

Brand preference and awareness may be the most important factor affecting market entry to Korea. Food brands that are popular among Korean travelers to the U.S. have opportunities in the Korean market. Examples of strong brand awareness are Blue Bottle Coffee, Randy’s Donuts, b. patisserie, and Tartine Bakery, which have all entered the Korean market in the past two years. 

The West Coast and New York City are the two most popular destinations for the Korean travelers to the U.S. During their visit, the Korean travelers are introduced to new brands and products and build preference there. Industry experts point out that U.S. food service brands that have outlets in the west coast or New York city, increase brand recognition for Koreans. In fact, out of 43 U.S. food brands operating in Korea that Commercial Service has identified, all of them have outlets in the west coast or in NYC. Blue Bottle Coffee, Randy’s Donuts, b. patisserie, and Tartine Bakery have outlets throughout California, indeed. 
   
If you are interested in the Korean market, your brand should gain popularity among Koreans before entering the Korean market. Operating food service outlets in the west coast or NYC is one of the ways to increase brand awareness.

For more information contact your local U.S. Commercial Service  office or Jinjoo.lee@trade.gov or Office.Seoul@trade.gov.