Lotteria's Boycott of Baemin Club: Impacts on Franchises

Lotteria's boycott of Baemin Club delivery highlights increasing franchise concerns over rising costs and profit margins.

### Lotteria's Boycott of Baemin Club
Lotteria has declared a boycott of the Baemin Club for store deliveries, citing the **increased cost burden on franchisees** as the reason. The head office's collective decision not to join the Baemin Club is seen as **beneficial for store operators**. Lotteria's food prices on Baemin are the same as in-store, and the shift of the **customer-borne delivery tip to the store owner** would make operating the delivery service **challenging**.

### The Impact of Delivery Fees on Store Owners
Delivery costs are becoming a burden for store owners, potentially leading to **negative margins** and making it **unfeasible for Lotteria to participate in the Baemin Club**. The current delivery fee in Seoul is **4,400 won for 1.2 km**, but can rise to **7,000-8,000 won** with longer distances or surcharges. Lotteria's competitive menu prices and reliance on their own delivery app for orders may lead to large franchises **strengthening their marketing efforts through their apps** in response to rising delivery fees.

### The Impact of Rising Costs on Store Owners and Delivery Services
Raising selling prices leads to **decreased consumer orders**, impacting store owners' **profits and business stability**. High delivery fees and commission rates are driving up costs, causing a **decline in store owners' profits** and **increasing their dissatisfaction**. Baemin's commission structure benefits from rising delivery prices, making it challenging to resolve the issue without **lowering these high commissions**.

### Struggles of Store Owners Amid Baemin's Policies
Store owners are left with only **2,000 won** after commission and delivery fees, leading to a **disastrous profit margin**. Franchises like Lotteria, Bonjuk, and Subway are gradually opting out of the Baemin Club due to its **negative impact on profits**. Baemin's market share has fallen **below 60%** for the first time, reflecting the **growing backlash against its policies and commission structures**.

### Impact of Baemin Club on Self-Employed Businesses: Lotteria's Boycott and Industry Reactions
* 🚫 Starting September 11, the Baemin Club will be applied to store deliveries, prompting Lotteria, a large hamburger franchise, to **boycott it to protect franchisees from increased costs**.
* 💰 Lotteria's decision aims to **prevent the burden of delivery fees from shifting entirely to self-employed business owners**, which could **significantly impact their profit margins**.
* 📊 If the Baemin Club is adopted, the delivery tip of **3,500 won** would become the responsibility of store owners, potentially leading to **negative margins for lower order amounts**.
* 🚚 Currently, delivery fees in Seoul are around **4,400 won for 1.2 km**, and if these costs are shifted to store owners without the ability to charge customers additional fees, many may find delivery **unfeasible**.
* 📉 As delivery fees rise, franchises like Lotteria are expected to **strengthen their marketing through their own apps**, as they face challenges in **managing fees while maintaining profit margins**.
* 🔼 Rising selling prices due to increased delivery costs could lead to **decreased consumer orders**, ultimately **reducing profits for store owners** and threatening the **sustainability of franchises**.
* 🏪 Other franchises, including Subway and Bonjuk, are exploring ways to **opt out of the Baemin Club**, reflecting a growing trend among businesses to **minimize reliance on delivery apps**.
* 🤝 The backlash against Baemin's policies is evident, as the company’s market share has **fallen below 60%**, indicating a shift in the landscape of food delivery services amidst **rising dissatisfaction among self-employed business owners**.

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