Pizza shop stabbing highlights soaring delivery costs and franchise pressure

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Pizza shop stabbing highlights soaring delivery costs and franchise pressure

Published: 05 Sep. 2025, 14:32 Updated: 05 Sep. 2025, 19:40

Audio report: written by reporters, read by AI

Police officers are at the scene of a fatal stabbing incident at a pizza franchise in Gwanak District, southern Seoul on Sept. 3. [YONHAP]

The recent fatal stabbing of three people including company executives by a pizza franchisee in his 40s in southern Seoul’s Gwanak District has drawn attention to the financial struggles faced by single-owner franchise outlets that rely heavily on delivery orders.

A franchisee running a similar one-person pizza shop described the situation: “Out of 30 million won ($21,550) in monthly sales, 15.5 million goes to delivery fees and app commissions and 10.5 million won to ingredient costs, leaving about 3.4 million won.”

A JoongAng Ilbo survey of franchise pizza outlets in Seoul on Thursday found that more than half sales at such shops — where the owner makes and packages pizzas before handing them to delivery workers arranged through apps — are consumed by delivery-related expenses.

“With monthly sales of about 30 million won, delivery fees, commissions and VAT alone add up to around 15.5 million won, or 51.6 percent,” said one franchisee in Gwanak District. “On a 10,000 won menu item, 3,400 won goes to delivery, 780 won to the intermediary commission and 448 won to VAT.”

“On top of that, there’s 900,000 won in rent and another 10 million won for ingredients and other expenses, so what’s left is about 3.4 million won in profit,” the franchisee said.

The family of the suspect in the stabbing case on Wednesday said that the suspect frequently complained before the crime: “After paying delivery commissions, the numbers just don’t work. I can’t afford staff, and at this rate, I’ll collapse soon.”

They also claimed that he'd been pressured by headquarters to sell new “single-person menu” items that only worsened losses.

Police officers are at the scene of a fatal stabbing incident at a pizza franchise in Gwanak District, southern Seoul, on Sept. 3. [YONHAP]

The franchise CEO acknowledged that many owners are struggling with platform commissions.

“The real conflict is between the delivery apps and the franchisees,” the CEO said. “When franchisees say the apps are taking all the profit, we recommend new menu items that might help boost sales.”

Restaurant owners widely agree that the dominance of delivery apps is eroding profitability, particularly at pizza and other food outlets heavily reliant on them.

A Seoul survey showed that as of October of last year, 48.8 percent of franchise sales came through delivery platforms, and commissions accounted for 24 percent of that amount — up 6.9 percentage points from the previous year’s 17.1 percent.

Conflicts with franchisors further burden owners, particularly those pertaining to interior renovation costs. The recent stabbing murder in Gwanak District was related to interior design costs.

Police officers are at the scene of a fatal stabbing incident at a pizza franchise in Gwanak District, southern Seoul, on Sept. 3. [YONHAP]

Under a 2013 revision of the Franchise Business Act, franchisors must cover 20 percent of renovation costs, and 40 percent for relocation or expansion, but some have been caught shifting full costs to franchisees.

In 2024, the average franchise startup cost in Seoul was 113 million won, with interior work accounting for 51.5 million won, or 45.6 percent, according to Seoul city.

“While the law eased the burden somewhat, practices such as forcing franchisees to use designated contractors still persist,” said a representative of the Korea Franchisee Union.

In the Gwanak District stabbing case, disputes over renovation costs reportedly triggered the violence.

“The company-recommended contractor did shoddy work, leading to leaks, but neither headquarters nor the contractor took responsibility,” the family of the suspect said.

Police officers are seen at the scene of a fatal stabbing incident at a pizza franchise in Gwanak District, southern Seoul, on Sept. 3. [YONHAP]

“The free repair period of one year had expired, and the contractor offered paid repairs, which caused the conflict,” the CEO of the franchise countered.

Disputes also frequently arise over “mandatory items” — ingredients and equipment franchisees must purchase directly from headquarters. Many franchisors are accused of inflating margins on these items, leading to lawsuits. Currently, 2,491 franchisees across 17 brands are suing over such practices.

“Many franchisees start with little experience or capital, so unexpected costs can quickly push them into crisis,” said Seo Ji-yong, a professor of business administration at Sangmyung University. “The government, along with the Fair Trade Commission, should consider regulating delivery fees.”

“Even if headquarters only recommends a contractor, small business owners feel they can’t refuse,” said Lee Jong-woo, a professor of business administration at Ajou University. “Regulators need to provide clearer guidelines.”

The suspect in the Gwanak District stabbing case, accused of stabbing three people before attempting suicide, remains hospitalized. Police said he will be arrested on murder charges once his treatment is complete, and investigators are questioning associates to determine his exact motive.

If you or someone you know is feeling emotionally distressed or struggling with thoughts of suicide, LifeLine Korea can be contacted at 1588-9191 or the Crisis Counseling Center at 1577-0199. The Seoul Global Center offers English-language counseling; contact 02-2075-4180 (+1) to arrange a session. Other international helplines can be found at www.befrienders.org.

This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.
BY IM SOUNG-BIN, KIM CHANG-YONG [[email protected]]