Franchises are drawing strong interest as investors seek to scale them internationally.

LBM, owner of London Bagel Museum, has been in talks with domestic and international private equity firms about a potential sale. JKL Partners has emerged as a leading bidder, though LBM insists it is focused on securing capital for overseas expansion in Japan and Singapore, targeting a 300 billion won ($206.4m) valuation.

Since mid-2024, private equity has driven major deals in the sector. Elevation Equity Partners Korea and Jollibee acquired Compose Coffee for 470 billion won, while Samhwa Foods took control of yogurt brand Yoajung. Forest Partners is negotiating a 160 billion won acquisition of Myeong Ryun Jinsa Galbi.

Korean food brands have gained global traction, fueling investor confidence. In 2024, Korean food exports hit $11.7bn, up 6% from the previous year, with US shipments surging 20%. Private equity firms now see strong international growth potential, leading to a renewed push for acquisitions.

Firms are targeting brands with expansion potential. Q Capital Partners and Koston Asia are selling chicken franchise Norang Tongdak, while Compose Coffee’s new owners are positioning it as a budget-friendly brand across Southeast Asia.

Experts argue private equity ownership can drive long-term growth by providing capital and operational expertise. Recent successes include Hahn & Co.’s turnaround of Namyang Dairy Products and KL&Partners’ expansion of Mom’s Touch, which tripled profits in four years.

With a favorable investment climate, stalled franchise sales may gain momentum. Affinity Equity Partners-owned Burger King Korea and Mom’s Touch are reportedly back on the market, signaling renewed deal activity in the sector.

Source: The Korea Herald

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