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Photo courtesy of Yonhap News |
[Alpha Biz= Kim Jisun] Seoul – Several franchise owners of Kyochon Chicken, one of South Korea’s largest fried chicken chains, announced plans to file a lawsuit against the company, claiming that insufficient chicken supplies from headquarters led to sales losses.
According to industry sources on September 7, four franchisees are preparing to submit a damages suit later this month, seeking a combined KRW 100 million (USD 73,000).
The franchisees allege that from November 2023 to July 2024, Kyochon supplied only about 40% of the chicken they ordered, significantly reducing sales. They argue that because franchise agreements require all chicken purchases to be made exclusively through headquarters, they had no alternative supply channels.
In February, more than 100 franchisees staged a protest at Kyochon F&B headquarters in Pangyo, demanding solutions to ongoing supply instability. At that time, Lee Sang-ro, Head of Kyochon’s Domestic Business Division, reportedly signed a written pledge guaranteeing compensation if annual supply volumes fell below a certain level. Franchisees now claim that despite this pledge, neither the supply issue nor compensation has been resolved.
Kyochon responded that it has been working to honor its commitments but noted that chicken supply shortages have been affected by external factors such as wholesale market conditions and avian influenza outbreaks during winter. The company also explained that its menu is heavily reliant on chicken legs and wings, which wholesalers are reluctant to distribute without also selling less popular parts like chicken breast—further limiting supply.
Separately, the Fair Trade Commission (FTC) is investigating whether Kyochon violated the Franchise Business Act by requiring franchisees to purchase chicken exclusively from headquarters while failing to provide stable supply.
Alphabiz Reporter Kim Jisun(stockmk2020@alphabiz.co.kr)
