Sales of South Korea's major chicken franchises rose in 2017 from the previous year amid a growing number of affiliated outlets going out of business due to intense competition, industry sources said Tuesday.

Fried chicken and beer, called "chimaek" in South Korea, is one of the most popular foods in the country along with soju and samgyeopsal, or grilled pork belly.

Kyochon, the biggest franchise, posted a 9.5 percent increase to 318.8 won ($301 million) in sales last year from a year earlier.

BHC witnessed a 2.8 percent surge to 239.1 billion won, followed by BBQ at 235.3 billion won, up 7.1 percent on-year.

Operating profits of the three biggest chicken franchises are estimated at 6-9 percent of sales.

The number of stores affiliated with Kyochon rose to 1,038 as of the end of last year from 1,017 a year earlier.

The number of BHC-affiliated outlets also increased to 1,439 last year from 1,395 the previous year. BBQ-affiliated shops reached 1,490 from 1,400.

Franchise shops, meanwhile, have been suffering from soaring labor costs, rental fees and prices of raw materials. They have also shied away from raising chicken prices due to government oversight.

"We expect a growing number of chicken shops to shut down as they are no longer in a position to cope with rising costs," an industry source said.

The number of chicken franchise stores that shut down jumped 10 percent to 2,793 in 2015 from the previous year, and the figure is likely to soar this year, industry data showed.

The chicken franchise business is still the first choice for the self-employed, despite concerns that the chicken franchise market is already saturated. (Yonhap)