Among the restaurant franchise stores, it was found that nearly half have not recovered their investment after 3 years of starting the business. The average recovery period for stores that recouped their investment was 31.4 months (2.6 years), while those still recovering are expected to take an average of 38.6 months (3.2 years).
The Korea Federation of Small and Medium Enterprises released the results of a survey conducted on 514 franchise stores in the restaurant industry on the 14th. The percentage of stores that reported recovering their investments was recorded at 49.6%.
The response stating 'in the process of recovery' was 35.4%, while the response that it would be 'difficult to recover after 10 years' accounted for 15.0%. About half of the surveyed franchise stores have not been able to recover their investments.
The average period for franchise stores that have recovered their investments was recorded at 31.4 months (approximately 2.6 years). Franchise stores that are still in the process of recovery projected that it would take approximately 38.6 months (about 3.2 years) to recover their investments. This means that it takes at least 3 years or more to generate revenue after starting the business.
By industry, the recovery completion rate for 'snack' franchise stores was the highest at 53.8%. The industry with the lowest rate was 'coffee and dessert' at 38.6%.
55.3% of the responding businesses reported that they continue to pay franchise fees after establishing their business. Continuing franchise fees refer to all payments made by franchisees to the franchise headquarters regularly or irregularly, regardless of the name, including business sign usage fees, training costs, and management support fees. The types of continuing franchise fee payments were ranked in order as 'fixed royalty' (43.0%), 'differential franchise fee' (39.4%), and 'percentage-based royalty on sales' (34.5%).