"Customers Lined Up for Hundreds of Meters, Yet Losses Hit 200 Million Won"... Lee Hyori and Hanhae: "Never Open a Cafe"—Why?

[Financial News] Famous celebrities have revealed the harsh reality of opening and operating cafes based on their own experiences, warning of the structural risks facing self-employed business owners. Their accounts reaffirmed the industry's reality: even cafes that attract public attention through opening-day rushes and long waiting lines can struggle to generate actual profits because of high rents and cutthroat competition.
Singer Lee Hyori told a cast member who hoped to open a cafe, "Do you know how difficult it is to start a cafe?" She made the remarks on Love War, a JTBC entertainment program that aired on the fifth, while discussing her husband Lee Sang-soon's experience running a cafe in Jeju.
Lee Sang-soon opened a cafe on Jeju Island in 2022. In its early days, the cafe became so popular that a waiting line stretching hundreds of meters formed, while nearby residents complained about traffic congestion and other inconveniences. It later switched to an entirely reservation-based system. However, the cafe closed in May 2024, about two years after opening, when its lease agreement expired.
Lee Hyori said, "Even though people lined up for hundreds of meters and it caused such a commotion, we still didn't make much money. Cafes are very risky." She pointed out that a temporary influx of customers driven by buzz does not necessarily translate into stable operating profits.
Rapper Hanhae, who appeared on the program with her, also shared his experience of closing a yogurt and coffee shop in Seoul's Sangam-dong three or four years ago. Hanhae said, "I ran it for two years, but only six months were actually spent doing business. I spent the remaining year and six months just hanging on." He added, "The losses alone amounted to between 150 million and 200 million won."
He cited the burden of fixed costs and the aggressive expansion of low-priced coffee franchises as the main reasons for the failure. Hanhae explained, "Opening a cafe may look romantic on the surface, but once you factor in rent, it's like hell. Even if I sold a cup of coffee for 2,000 won, the franchise store right next door was selling it for 900 won, making competition impossible."
Self-employment and startup experts say the case illustrates the overcrowding and structural limitations of South Korea's coffee and beverage market.
According to Statistics Korea and industry sources, the number of coffee shops in South Korea has already surpassed 100,000, leaving the market saturated. Although low barriers to entry have led many retirees and young people to open cafes, operating profit margins have been declining each year as rising prices for raw materials such as coffee beans and milk combine with high rents and labor costs.
In particular, amid a low-margin, high-volume price war with large ultra-low-cost franchises that have recently taken over neighborhood commercial districts, the closure rate of independent cafes without differentiated business models is rising sharply.
A startup consulting expert advised, "Even if customers flock in because of buzz or star marketing, a business has no choice but to fall into the red unless it can overcome limitations on seat turnover and fixed costs such as rent and labor. Starting a cafe based on vague admiration or by chasing a trend can lead to enormous financial losses, so a thorough break-even point (BEP) analysis must come first."
[email protected] Moon Young-jin Reporter