Korean Fried Chicken, How Seoul Owners Are Winging It
South Korean fried chicken franchises are popping up all over the country. Tight competition is squeezing owners.
SEOUL — The main difference between American and Korean preparations of fried chicken comes down to the marinades. Popular ones here are soy sauce, garlic and the quintessential Korean flavor yangnyum.
Lee Seon-young, who runs a chicken and beer restaurant in my neighborhood, squeezes the sweet and spicy sauce over a batch of crispy tenders that he just pulled out of a deep fryer. Unlike KFC's Colonel Sanders' original recipe, the ingredients for yangnyum are no secret.
"It's made of sugar syrup, pepper paste, ketchup and paprika powder, ah, and some other stuff," Lee says.
There are around 50,000 chicken joints in South Korea. Most are franchises and deliver to customers doors via motorbike. It's not unusual for dozens of these small restaurants to cluster together in a residential area.
Jeong Eun-jeong, an author of a book on the history of Korea's chicken industry, says these restaurants appeared on the scene 20 years ago after the Asian financial crisis, which took a big toll on Korea's economy.
"A lot of middle aged men were fired from their jobs then. And many of them opened chicken franchises," she says. "So these restaurants became popular not because Koreans like eating fried chicken so much but because suddenly there were just so many of these places and then Koreans started eating more chicken."
She explains there's a notion in Seoul that if you want to own your own business, you should open a restaurant even if you have no experience in the food industry. Entrepreneurs pay for culinary classes at chicken academies run by franchises.
Shin Hyun-ho runs one such school in Seoul. He teaches newcomers how to cook and manage a franchise. He says it's a competitive industry but still easy to be successful.
"Everyone likes chicken, so there are plenty of customers," says Shin. "The initial investment doesn't have to be that much, it's up to the new owner."
The low investment attracts entrepreneurs. Three years ago, Park Shi-kyung took out a $150,000 loan to open a chicken restuarant restaurant. The 45-year-old already ran his own sign-making company. But he says he needed to earn more money to support his family.
"I'm at an age when I need to earn more money so I can pay for my two kids' private education to get them ready for university. But running this kind of business was harder than I thought it would be," he admits.
Park's restaurant is one of about 50 chicken places in his neighborhood. He says the competition and lackluster economy is making it almost impossible to earn money.
"Ahhhh, well, on average, in a month, I don't make any money at all. After paying back the loan, buying ingredients, paying my staff and paying rent, my profits are zero. Right now, nothing," Park says.
Jeong Eun-jeong says Park's situation is typical. Most franchise owners never make a profit. She says they can't close their restaurant either because then they's lose everything.
"Most chicken restaurant owners use their apartments as collateral when they take out a loan to open their restaurants. So, they also lose their homes when the business fails," she says.
Jeong estimates that each year, about half of all chicken restaurants in Korea go out of business. But that's not stopping new entrepreneurs from entering the market. A lack of jobs for college graduates has seen restaurant owners get younger and younger.
Lee Seon-young, 31, owner of my neighborhood chicken joint, says he knew how tough the chicken business was when he opened his place six months ago. He tells me there's even a phrase to describe the competition between restaurants.
"We call it the chicken game. People lower their prices to be competitive and that ends up putting them out of business."
Lee says business is good. He's not playing the chicken game.