No Brand, operated by Shinsegae Food, announced on the 8th that it will introduce a new franchise model called the ‘compact store’ to reduce startup expenses. Compared to the previous model, the startup expense has been lowered by 40%, alleviating the burden on prospective franchise owners.
Kang Seung-hyup, CEO of Shinsegae Food, noted at the No Brand burger press conference held at Studio 159 in Gangnam, Seoul, on the morning of the same day, “By encapsulating the value of No Brand, which is to keep only the essentials and eliminate unnecessary elements, we have prepared the optimal solution for prospective franchise owners to start their businesses more lightly than before.” He added, “We aim to enter the top three in the burger industry by 2030 with this new franchise model as our competitive edge.” The intention is to attract more prospective franchise owners through the introduction of the reduced-expense compact store, creating a virtuous cycle of business expansion based on this foundation.
No Brand burger is a mid-range burger brand launched by Shinsegae Food in August 2019. After opening its first store in Hongdae, Seoul, it surpassed 100 stores in just 1 year and 8 months. However, the growth rate of the number of stores has recently slowed. As of 2023, the number of stores stands at 246, and is expected to be 265 in 2024. The emergence of new mid-range burger brands, like Frank Burger, has intensified competition. Frank Burger has been aggressively expanding, opening 650 stores within four years of its launch in November 2019.
According to global market research firm Euromonitor, the size of the Korean hamburger market has grown from 3 trillion won in 2020 to approximately 5 trillion won in 2023. As the market size has increased, competition has intensified, with both domestic value-for-money brands and overseas premium handmade burger brands entering the domestic market.
According to No Brand burger, the compact store is a small store with an area of 15 pyeong. It has streamlined the necessary elements for store operation to optimize kitchen space and improve customer flow. No Brand burger stated that the opening cost of the previously operated standard model (based on 25 pyeong) was 180 million won, while the compact model (based on 15 pyeong) has lowered this to 105 million won.
No Brand burger announced that it simplified its construction manual to reduce expenses. The construction period has been shortened from 4 weeks to 3 weeks, and the number of types of finishing materials for the store has been reduced from 22 to 14. The kitchen space has also been changed from a wet kitchen to a dry kitchen, which has reduced floor construction costs. The design of the signage has been simplified as well. While minimizing cooking routes, it has increased the number of seats per pyeong by 35% compared to before to enhance space efficiency. No Brand burger currently operates its franchise business on a ‘royalty (trademark licensing)’ basis, with a royalty fee of 4% of revenue.
Additionally, No Brand burger recently launched a new menu item called ‘NBB Amazing Double,’ which reflects current burger consumption trends. The NBB Amazing Double is a double patty burger following the ‘Meat Mania’, ‘NBB Amazing Double Up Burger’, and ‘Double Bulgogi Burger’. The weight of the two patties is 130g, which is said to be more than 30% heavier than competitors' double patty burgers, according to No Brand burger. The patties are enhanced with smoked flavors, and the buns have been replaced with softer and moister bread compared to before. The price is 4,500 won for the single item and 6,400 won for the set.