Kraze Burgers, Mr. Pizza set to go overseas

The Korean government wants Mr. Pizza and Kraze Burgers to become international brands that could compete with the likes of Pizza Hut and McDonald’s.

The Ministry of Knowledge Economy and the Korea Trade-Investment Promotion Agency, or Kotra, said yesterday they will provide 13 local franchises with support to launch their businesses overseas.

The companies will receive state support in conducting overseas market research and understanding legal and financial procedures in establishing operations.

The franchises will also receive help in finding local business partners, outsourcing contractors, local employees and marketing advice.

Eight of the 13 franchises are food outlets, while other businesses include hair salons, laundries and opticians.

Domestic franchise businesses have expanded rapidly, with the value of the franchise market estimated at 86 trillion won ($77.5 billion) this year. But efforts to expand overseas have been slow due to lack of knowledge.

In a December survey of 161 local franchise businesses conducted by Kotra, 37 percent of the companies said the lack of information on overseas markets was the biggest hurdle to starting operations overseas.

The next biggest difficulty, which 17 percent reported, was acquiring local partners.

“There was much difficulty in getting information on business opportunities in the countries where we wanted to start business,” said Seo Jeong-beom, a marketing strategist at Cleantopia, a laundry service provider, one of the 13 selected franchises.

Seven of the 13 companies said they wanted to select Beijing or Shanghai for their fist overseas operation.

“Franchises are a promising export sector for Korea with which we can also export human resources, facilities, equipment and raw materials,” said Chung Jae-hoon, a ministry official.

By Moon Gwang-lip [joe@joongang.co.kr]