18% of Franchisees Report Over 51% Sales Decline Due to COVID-19

[Suwon Ilbo=Reporter Park No-hun] As COVID-19 has caused sales to drop by over 51% at 18% of domestic franchised businesses, Gyeonggi Province is pursuing measures for mutual cooperation between franchisors and franchisees to minimize damage.

According to Gyeonggi Province and the National Franchisees Association on the 19th, a survey conducted from the 9th to 13th showed that among 3,464 franchisees who responded (931 franchisees based in Gyeonggi Province), 21% experienced a 20-30% sales decline due to COVID-19.

By range, the breakdown was: 0-10% decline 14%, 10-20% 18%, 31-40% 18%, 41-50% 10%, and over 51% 18%.
Even in the chicken and pizza sector (88%) and bakery sector (95%), which were estimated to have increased sales, the difference in decline was minimal, with responses indicating that overall sales decreased.
The most common responses from each franchise establishment regarding reduced sales were reduced business hours (77%) and workforce adjustments through reduced working hours or layoffs (48%).

Accordingly, the province plans to pursue mutual cooperation measures by encouraging franchisors based in the province to actively support franchisee businesses in difficulty, and to separately announce a list of franchisors contributing to mutual cooperation by confirming support provided or planned for franchisees. Additionally, the province decided to review various forms of recognition for social contribution, such as awards for excellent mutual cooperation businesses.

Lee Yong-soo, head of Gyeonggi Province's Fair Trade Bureau, stated, "While the situation is difficult for everyone, franchisors appear to have relatively more capacity than franchisee operators," and added, "If the mutual cooperation efforts between franchisors and franchisees that have already begun expand, we expect that difficulties arising from the prolonged COVID-19 situation can be overcome wisely."

Meanwhile, according to Gyeonggi Province's survey, food franchise Chaesundang, contact lens franchise Lens Me, sushi, roll, and salad buffet franchise Cuckoo, and Dalkomcoffee, all based in the province, are temporarily implementing royalty exemption policies, while 7th Avenue Pizza provides delivery cost discount promotion support. It has been identified that multiple franchisors in the province are already supporting franchisee operators in the spirit of mutual cooperation.