Major South Korean coffee franchises are increasingly targeting the U.S. market. After focusing on Southeast Asia, K-coffee franchises are now expanding into North America.
According to industry sources, Twosome Place opened its first U.S. location in Alexandria, Virginia, on October 17. On opening day, a line formed outside the store, reflecting strong local interest until closing at 8 p.m. Twosome aims to capture the premium all-day cafe market by pairing Korean-style cakes and coffee, such as its popular 'Scho-sang' cream cakes. Initially, the brand will establish itself through direct management before expanding its locations, with plans for two or three more stores in the Washington, D.C. area.
Meanwhile, budget coffee brand MegaMGC Coffee is set to open its first North American store in Manhattan's Flatiron District by the end of the year. The company plans to use its New York location as a launchpad for franchise expansion across the U.S. It will determine local pricing based on competitive analysis.
Other major franchises are also preparing for North American entry. The Venti signed a multi-unit franchise agreement with local partner JINP last November. It plans to open its first location in Las Vegas next year, followed by expansions into Los Angeles and San Francisco.
Ediya Coffee, which already has locations in Guam and Canada, plans to open its second Canadian store in the fourth quarter of this year and another in Guam next year, aiming to strengthen its North American presence. Additionally, Baekdabang is positively considering its U.S. expansion through a local subsidiary, evaluating suitable entry strategies and business models based on varying consumer cultures in different cities.
The shift of domestic brands toward the high-risk U.S. market is largely due to structural limitations in the South Korean market. The domestic coffee shop sector has reached saturation in key commercial areas, leading to concerns about market encroachment among franchises and significant restrictions on new openings. According to the Fair Trade Commission, the number of stores for nine major coffee brands in South Korea reached over 17,000 by the end of last year.
Moreover, rising prices for key raw materials like coffee beans, along with increased rent and labor costs, have made it difficult to sustain past growth levels solely through domestic operations. As a result, these brands are seeking to secure new revenue streams and enhance corporate value in the world's largest coffee-consuming country.
However, the experiences of first-generation K-coffee franchises like Hollys, which opened its first U.S. store in Los Angeles in 2008, and Cafe Bene, which launched a large store in New York's Times Square in 2012, serve as cautionary tales. Both faced challenges with overexpansion and localization failures, leading to store closures. The success of these second-generation brands will be closely watched. Key factors will include a phased approach to establishing a presence, leveraging local partners, and ensuring clear differentiation in pricing and dessert offerings.
One industry insider noted, "The U.S. is a battleground for global dining brands, so managing high fixed costs like rent and local labor and logistics is a primary challenge. Beyond one-time marketing tied to the K-food trend, brands must develop unique competitive advantages that resonate with local consumers to succeed."
* This article has been translated by AI.
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