Three-year survival rate falls to 39.2%, down 3.8 percentage points from a year ago, as rising chicken prices and franchise fees squeeze owners
The fried chicken industry has been riding a wave of attention after Nvidia CEO Jensen Huang visited BBQ and Kkanbu Chicken during his trip to South Korea. But the reality for most shop owners is far grimmer: six out of 10 fried chicken restaurants in Seoul close within three years of opening.
According to the Seoul Metropolitan Government's commercial district analysis service, Seoul had 5,783 fried chicken restaurants as of the first quarter of this year, down 2.7 percent from a year earlier. Franchise outlets fell 3.2 percent, from 3,822 to 3,698, while independent shops declined 1.8 percent to 2,085. The closure rate for fried chicken restaurants in the first quarter, at 3.9 percent, also outpaced the opening rate of 3.4 percent.
The three-year survival rate stood at just 39.2 percent — down 3.8 percentage points from 43.0 percent a year earlier and below the 40 percent threshold for the first time. That figure trails the dining industry average of 46.0 percent, as well as coffee and beverage shops (48.4 percent), beer halls and bars (47.0 percent), and hansik, or Korean food, restaurants (45.1 percent).
Fried chicken is particularly sensitive to economic conditions. According to the Korea Agro-Fisheries and Food Trade Corporation's 2025 Foodservice Industry Business Trend Index, the domestic foodservice industry's sales index fell 1.77 points last year from the previous year to 73.84. The sales index for fried chicken restaurants dropped 1.67 points to 73.16.
According to the Korea Fair Trade Commission, the average differential franchise fee in the fried chicken sector reached 41 million won ($26,900) in 2024, up 17.1 percent from the previous year. That is 15 million won more than the overall foodservice industry average of 26 million won. The share of average sales paid out as differential franchise fees also stood at 9.5 percent — the highest of any sector.
Chicken prices have continued to climb. According to the Korea Institute for Animal Products Quality Evaluation, the average retail 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 fried chicken franchise operators responded with "shrinkflation" — reducing portion sizes rather than raising prices.
A 2025 survey of foodservice businesses by the Korea Rural Economic Institute found that fried chicken restaurants using online food delivery apps spent an average of 555,376 won per month on delivery app fees — the highest of any sector and 196,972 won more than the foodservice industry average of 358,404 won. The figures underscore how heavily delivery app costs are weighing on fried chicken shop owners.
"As consumption declines and operating costs such as labor expenses rise, the management burden on owners will have grown considerably," said Lee Jong-woo, a professor in the distribution and marketing department at South Seoul University.
korean@heraldcorp.com
