[Data Pick] 1,289 Franchise Brand Registrations Canceled in H1... 8 Out of 10 Cancellations in 'Food Service'

Pizza Hut and Yeonan Sikdang Also Cleared Out, One Operator Canceled 15 Simultaneously... By 'Cancellation Rate', Retail/Wholesale is Actually Higher

In the first half of 2026 (January to June), it was found that the registrations of 1,289 business marks (brands) among the franchise business information disclosure documents registered with the Fair Trade Commission (FTC) were canceled. Names familiar to general consumers were included in large numbers, such as 'Pizza Hut', 'Yeonan Sikdang', 'Shin Mapo Galmaegi', 'Guljak Topokki', and organic brand 'Orga'. This is the result of a comprehensive analysis of the FTC's franchise business transaction data by this journal.

8 Out of 10 Cancellations Are in Food Service... But the 'Cancellation Rate' is Not Uniquely High for Food Service

Excluding two duplicate registration numbers from the total 1,289 cases, there are 1,287 unique information disclosure documents. Among these, the food service industry accounted for 1,048 cases, representing 81.4% of the total. The service industry stood at 173 cases (13.4%), and the wholesale and retail trade industry was only 66 cases (5.1%). This essentially means that the vast majority of cancellations came from food service franchises.

However, it is difficult to conclude that "the food service industry has collapsed particularly hard" based solely on the number of cases. According to the FTC's '2025 Franchise Business Status Statistics', the registered brands at the end of last year were 10,886 in food service, 2,181 in services, and 658 in wholesale and retail. Simply calculating the cancellation incidence rate in the first half based on this, wholesale and retail leads at 10.0%, followed by food service at 9.6%, and services at 7.9%. While the absolute number of food service cases is overwhelming, in terms of the ratio to the original number of registered brands, the wholesale and retail industry is actually slightly higher, and the food service industry does not particularly stand out. Because there are inherently so many food service brands, there is an optical illusion that there are also many cancellations.

Cancellations Concentrated in Korean Food and BBQ Restaurants, Retreat of Mass-produced '○○-Jib-Iya (○○ House)' Brands

Within the food service industry, the exodus of Korean food and BBQ restaurant lines was the most prominent. In the March list (50 food service cases) where detailed sectors (mid-classification) were indicated together, Korean food accounted for about 42% of food service cancellations with 21 cases, followed by bunsik (snack food), Western food, chicken, Chinese food, and Japanese food. Looking at the overall brand names in the first half, Korean food and meat categories such as galbi, samgyeopsal, gopchang, and gukbap were the most numerous, followed by coffee and beverages, chicken, and Japanese food and raw fish restaurants. Cancellations were concentrated in sectors with low entry barriers where brands had flocked.

Cases where a single operator folded multiple brands at once were also notable. The 1,287 unique brands belonged to 1,094 operators, and among these, 100 operators canceled two or more brands, with the brands canceled by them alone totaling 293, or 22.8% of the total. By operator, Teamf F&B had the most with 15, followed by GO Company with 9, Gilpum F&B and Wow F&S with 8 each, and Moadream F&B with 7. The brands canceled by Teamf F&B included a series of mass-produced brands named simply after their industry, such as 'Ramen-jib-iya', 'Gogi-jib-iya', 'Malatang-jib-iya', 'Chicken-jib-iya', 'Donkatsu-jib-iya', and 'Pasta-jib-iya'. Brands that had promoted recently trendy sectors like malatang and tanghulu were also cleared out together.

What is noteworthy is that it is not only old brands that folded. Based on the year of the registration number, 76.5% of the uniquely canceled brands were registered after 2021, and 27.2% after 2024. This means that a significant number of brands were created to follow trends in recent years and were cleared out in a short period. In fact, at the end of last year, 74.4% of all franchise brands (13,725) were small-scale brands with fewer than 10 franchise stores. The number of brands increases by double digits every year, but correspondingly, brands that fail to settle in the market and disappear early are also rapidly accumulating.

From 'Ex Officio Clearance' at the Beginning of the Year to 'Voluntary Exit' in the Spring

The nature of the cancellations changed distinctly during the first half of the year. By type, voluntary cancellations amounted to 975 cases (75.6%), exceeding three times the ex officio cancellations (314 cases), but the pattern by period was exactly the opposite. Monthly cancellations were 198 cases in January, 147 cases in February, 65 cases in March, 565 cases in April, 198 cases in May, and 116 cases in June.

At the beginning of the year, ex officio cancellations constituted the majority. In January, 163 out of 198 cases were ex officio cancellations, and in February, 124 out of 147 cases were ex officio cancellations. In particular, 278 ex officio cancellations were concentrated in just two days, with 162 cases on January 29 and 116 cases on February 25. It was a period with a strong administrative character, as authorities collectively cleared out brands that failed to fulfill obligations such as change registration.

On the other hand, the nature changed as spring arrived. April had the most cancellations in the first half with 565 cases, and among these, 560 cases were voluntary cancellations by the operators, while most in May (196 cases) and June (114 cases) were also voluntary cancellations. Given that the regular change registration deadline for the information disclosure documents of settlement corporations is typically 120 days after the end of the business year, this overlaps with the trend of headquarters deciding to fold their business ahead of the renewal period and voluntarily returning their registrations.

Market inflows must also be looked at together. New information disclosure document registrations during the same period were 589 cases; simply comparing the public lists, first-half cancellations exceeded new registrations by 700 cases. However, in June, new registrations exceeded cancellations by 11 cases, marking the first time in the first half that new registrations surpassed cancellations.

Pizza Hut, Yeonan Sikdang... Famous Brands Were No Exception

In addition to the elimination of small brands, the registration cancellation of popularly known brands also continued. The most notable is the global pizza brand 'Pizza Hut'. Pizza Hut Korea voluntarily canceled the Pizza Hut information disclosure document on May 21, which occurred not as a simple business closure, but in the process of the existing corporate entity dissolving under a liquidation-type rehabilitation procedure. On the 6th of the same month, Sunshine Food voluntarily canceled five brands simultaneously, including the seafood dining 'Yeonan Sikdang', the BBQ restaurant 'Shin Mapo Galmaegi', the Chinese restaurant 'Gonghwachun', 'Gorae Sikdang', and 'Gorae Gamjatang'.

Besides these, the topokki franchise 'Guljak Topokki Chicken', Pulmuone's organic distribution brand 'Natural House by Orga', global bubble tea 'CoCo Fresh Tea & Juice', and English education brand 'Wall Street English' were listed in the first-half cancellation list. 'Shabu Hyang' and 'Mangwondong Tiramisu' were ex officio canceled on February 25, 'Gosu's Driving License' on March 3, and three Barmi-affiliated brands including 'Barmi Sushi Buffet' were voluntarily canceled on January 9. 'Kim Soo-mi's Mom's Taste' fronted by actress Kim Soo-mi (ex officio cancellation in February), along with 'YANKEE CANDLE', 'Ppalbong Bunsik', 'Pizza Ae', 'Mr. Healing', and 'Yukhoehan Salmon', were also included in the list.

However, the cancellation of an information disclosure document registration cannot be directly equated with a brand closure or the shutting down of all franchise stores. This is because existing information disclosure documents can also be canceled due to a change in the operating corporation, transfer of business, suspension of franchise recruitment, or failure to fulfill change registration. To determine whether a specific brand has actually ceased operations, it is necessary to jointly check the operational status of existing franchise stores and whether there has been a re-registration under a new operator's name. Nevertheless, the first-half cancellation data shows that the natural adjustment of oversupplied brands, the retreat of the mass-produced multi-brand model, and the business structure reorganization of large brands are progressing simultaneously in the food service franchise market.