Six in 10 Seoul fried chicken shops close within 3 years, data shows

Nvidia CEO Jensen Huang's visit to South Korea, which included stops at BBQ and Kkanbul Chicken, has given the country's fried chicken industry a brief moment in the spotlight. But the underlying reality is far grimmer: six in 10 chicken restaurants in Seoul shut down within three years of opening, according to new data.

The Seoul Metropolitan Government's commercial district analysis service said Wednesday that the number of chicken restaurants in Seoul stood at 5,783 in the first quarter of this year, down 2.7 percent from a year earlier. Franchise outlets fell from 3,822 to 3,698, a drop of 3.2 percent, while independent shops declined 1.8 percent to 2,085. The closure rate for chicken restaurants in the first quarter, at 3.9 percent, also exceeded the opening rate of 3.4 percent.

The three-year survival rate for chicken restaurants was just 39.2 percent, down 3.8 percentage points from 43.0 percent a year earlier and now below the 40 percent threshold. That figure trails the overall dining industry average of 46.0 percent, as well as coffee and beverage shops (48.4 percent), beer bars and casual drinking establishments (47.0 percent), and hansik, or Korean cuisine, restaurants (45.1 percent).

Chicken restaurants are particularly sensitive to economic conditions. According to the Korea Agro-Fisheries and Food Trade Corporation's 2025 food service industry business index, the domestic dining industry's sales index fell 1.77 points last year from the previous year to 73.84. The sales index for chicken restaurants dropped 1.67 points to 73.16.

Cost pressures are also squeezing owners. According to the Korea Fair Trade Commission, the average differential franchise fee in the chicken sector reached 41 million won ($27,000) in 2024, up 17.1 percent from the previous year and 15 million won above the overall dining industry average of 26 million won. The ratio of differential franchise fees to average sales was 9.5 percent, the highest of any food service category.

Chicken prices have continued to climb. According to the Korea Institute for Animal Products Quality Evaluation, the average consumer price of broiler chicken in June was 6,661 won per kilogram, up 19.6 percent from 5,568 won a year earlier. After prices surpassed the 6,000-won mark in March amid the fallout from a highly pathogenic avian influenza outbreak, some chicken franchise operators responded with "shrinkflation" — reducing portion sizes rather than raising prices.

Online food delivery costs are adding to the burden. A 2025 survey of food service businesses by the Korea Rural Economic Institute found that chicken restaurants using online food delivery platforms paid an average of 555,376 won per month in delivery app fees — the highest of any food service category and 196,972 won more than the industry-wide average of 358,404 won.

"The chicken industry has reached saturation, and competition has intensified across the board," said Lee Jong-woo, a professor of retail marketing at Namseoul University. "With consumer spending falling and operating costs such as labor rising, the management burden on owners will only have grown."