A survey has found that business conditions for self-employed workers remain weak amid a strong won and high interest rates. As sales and operating profit decline, the amount of overdue loan payments has also increased. There are also calls for prospective entrepreneurs to pay closer attention to financing and low-capital startup plans.
According to KCD's "Small Business Trends for the First Quarter of 2026" report released on the 23rd, the total outstanding loan balance for individual business owners in South Korea reached 732.2 trillion won in the first quarter of this year. That was up 3 trillion won from the fourth quarter of last year. The bigger issue is delinquency. The total amount of overdue payments, caused by borrowers failing to repay principal and interest, rose by 1.6 trillion won from the previous quarter to 14.6 trillion won. The pace of increase in the Composite Consumer Sentiment Index (CCSI) is also slowing. According to the Bank of Korea's "Consumer Sentiment Survey for June 2026," the CCSI stood at 106.6, up just 0.5 point from the previous month’s 106.1. The slowdown was attributed to the impact of high prices and a weak won.
Yoon In-cheol, a professor in the Department of Entrepreneurship at Gwangju University, said, "The three most important factors in starting a business are capital, location, and the concept. If you raise capital too aggressively, you could face serious risks." He added, "In the case of franchises, there are times when support is available for startup loans, interior work, and ingredients. Making good use of those programs can help reduce initial capital needs."
Recently, restaurant franchises have been using expanded support measures for prospective entrepreneurs as a way to strengthen brand competitiveness.
Damga Hwarogui has signed a business agreement with Shinhan Bank and is operating financial support policies for franchisees and prospective entrepreneurs. It has also introduced startup education programs for small business owners, along with financial support needed during the launch process. A Damga Hwarogui official said, "We plan to continue offering various forms of support to ease the burden of initial investment costs and fund management in the restaurant startup process, and to help establish a foundation for store operations."
Juk Story is operating a "business-type conversion startup" model for small business owners. The key idea is to make it possible to open a business without separate interior costs by making the most of existing store facilities. Juk Story is also diversifying into other business categories through its Korean set-meal brand, Sotbap. Sotjuk and Sotbap are characterized by a modern reinterpretation of traditional Korean meals. Manghyang Bibim Guksu is also supporting business-type conversion and logistics supply for stable operations.
As the economic slowdown continues, improving operating efficiency at franchise headquarters has also become an important task. Professor Yoon said, "Headquarters also need to pay close attention to many issues, including preventing disputes with franchisees and managing various marketing costs." To address these challenges, Franchise ERP systems have recently gained wider use. A LEAD PLANET official said, "Franchise ERP is designed so that franchise consultations, contracts, and store operations can all be managed in one system. Through integration with point-of-sale (POS) systems and various data sources, it allows companies to track sales and profits together, making it possible to provide faster support based on each franchisee's condition."
Kim Se-hyung, reporter fax123@sportschosun.com
