'Keep the main, raise the sides': Franchise chains hike side-menu prices to protect margins

Goobne Chicken, which recently reduced portion sizes instead of raising prices, will increase the prices of some side-menu items and the supply costs it charges franchisees starting Tuesday. Analysts say the move is a roundabout strategy to protect profitability by raising prices on peripheral items while keeping the flagship chicken menu unchanged.

G&Food, the company that operates Goobne Chicken, will raise prices on select side-menu items by up to 12.5% from Tuesday, according to industry sources. The price of spicy chicken feet will climb 9.5%, from 21,000 won ($14) to 23,000 won, while Bolognese pasta will rise 4.5%, from 6,700 won to 7,000 won.

Garlic butter Cajun potatoes and quattro cheese Cajun potatoes will go up 10%, from 5,000 won to 5,500 won, and Cajun potatoes will increase 12.5%, from 4,000 won to 4,500 won. Spicy cheese rice cake skewers will also rise 7.1%, from 2,800 won to 3,000 won.

Supply prices for items sold to franchisees will also be adjusted. The cost of bags used for chicken and pizza will rise roughly 8 to 18 percent, and pickles will go up about 5 percent. Spicy chicken feet and Cajun potatoes affected by the consumer price increases will similarly see supply costs rise 5 to 9 percent.

"Continued increases in raw material and subsidiary material costs have made it unavoidable to make minimum adjustments to supply and consumer prices for some items," a G&Food official said. "Headquarters has absorbed a significant portion of the cost increases until now, and we have adjusted only some items to the minimum extent possible to limit the burden on franchisees and consumers."

Last month, Goobne Chicken reduced the pre-cooked weight of its boneless drumstick menu from 800 grams to 700 grams, citing instability in chicken supply. The wing-bone menu was trimmed from 930 grams to 850 grams, and the whole drumstick menu from 905 grams to 820 grams. The changes drew criticism as "shrinkflation" — cutting quantity rather than raising the listed price.

The latest price increases are seen as a strategy to defend profitability by raising side-menu prices rather than touching the chicken menu, where consumer price resistance is high. Side items tend to carry lower price sensitivity and relatively higher margins than chicken, making them a more viable avenue for price increases. The comparatively muted consumer resistance to side-menu pricing is also believed to have factored into the decision.

Raising side-menu prices has become a common pattern across the franchise industry. Papa John's Korea last month raised prices on eight beverages — including Coca-Cola and Sprite — while leaving its main pizza menu untouched. Domino's Pizza similarly raised prices on Coca-Cola, Sprite and other drinks by 100 to 200 won depending on size.

Budget coffee franchise chains are following a similar trend. Mega MGC Coffee raised prices on three items in its "Hal-Mega Coffee" lineup by 200 won each. The Venti raised prices on all menu items except Americano by 100 to 500 won starting May 29. Coffee Bean raised prices on its vanilla latte stick coffee packaging by up to 8.1% this month, and Ediya Coffee raised prices on in-store stick coffee and coffee mix products by 4.3 to 15.2 percent starting June 6.

Lee Jong-woo, a retail marketing professor at Namseoul University, said main menu items like chicken represent a brand's identity and value, making companies reluctant to touch their prices. "With competition in the industry also fierce, raising main menu prices could trigger a drop in sales," he said. He added that more franchise chains may adopt similar strategies, given that side-menu items face comparatively little price resistance from consumers.