Popeyes may withdraw business from Korea

Popeyes website shows burger meal items. / Screen captured from Popeyes website

By Kim Jae-heun

American multinational fried chicken restaurant chain Popeyes is said to be pulling out of Korea.

Last week, a memo written by a Popeyes restaurant employee in Seoul went viral online that read “Popeyes brand will no longer pursue business in Korea as of November.”

The employee further noted that the chain's branch in Gwangjin-gu, eastern Seoul, will be the last restaurant before the company withdraws its business here.

However, an official from TS Corporation, the mother company of TS Food & System that operates Popeyes, denied the rumor.

“It may be true that some of the restaurants in the country will close down but not all will. I cannot give further details except that the company will continue to sell its brand here,” the official said.

Popeyes has been attempting to liquidate its business here through a local accounting firm since 2018 but the process has not gone smoothly.

Recently, it has been privately contacting potential buyers directly without going through a broker.

“Popeyes has made no progress while looking for a buyer among investment banks in the last two years. However, it looks like they are in negotiation with one candidate recently,” an industry source said in an interview with local media.

Popeyes entered the Korean fast food market in 1993 when TS Food & System signed an exclusive sales contract with parent company America's Favorite Chicken to bring Popeyes to Korea.

The following year, the fast food chain opened its very first restaurant in southern Seoul's upmarket Apgujeong, and at its height it had nearly 200 stores.

However, TS Food & System recorded an impaired equity ratio of 40 percent in 2018 and last year it was in negative equity.

The company wants to increase the brand value and restructure restaurants to improve the firm's profitability. It believes finding a new operator is the best option for doing so.

Popeyes has allegedly approached SPC Group, which operates popular international fast food chains including Shake Shack and Eggslut here.

SPC Group can also create synergy with the fried chicken brand as it runs food businesses capable of supplying flour, processed meats and egg products to related franchises.

Meanwhile, TS Corporation possesses knowhow from establishing and operating chicken and burger franchise restaurant Mom's Touch. However, it sold off the fast food chain to Haimarrow Food Service when it showed poor business performance in 2004. Last year private equity firm KL & Partners acquired Mom's Touch.