The secret sauce behind fast-growing franchise Ko Ko Dak's success

In less than three years, Korean fried chicken chain Ko Ko Dak has grown from a small start-up in an Auckland garage to nine restaurants – and the owner has plans for further national expansion.

Owner John Song puts its explosive growth down to using high quality 100% New Zealand ingredients - and his secret sauces and coatings.

“Everybody knows American-style fried chicken,” Song said, “but the difference in Korean chicken is the sauce, which gives it such a special, unique taste – we currently have six different flavours.

“Having some diversity of flavours means we can attract different customers.”

Before setting up Ko Ko Dak, Song had spent 12 years running sushi restaurants in Auckland, but noticed the market was becoming increasingly crowded.

He did his own research and discovered, according to Google Trends search data, that in the years following Covid-19, Kiwis’ interest in Korean fried chicken has slowly but surely increased.

Hoping to seize on this opportunity, Song set about developing his recipes with the help of his wife, a chef.

“She loves food, she loves to cook,” Song said. “She would try over and over again to get the recipe for a sauce or coating perfect.”

The first Ko Ko Dak store opened in March of 2021 in Auckland’s Ormiston suburb.

“It was a very difficult time,” Song said. “There were a lot of challenges, and lessons to be learned – I was studying franchising throughout that period, to improve our approach.”

As more stores opened and more franchises signed up, the demand for ingredients grew, and he began working out of Ko Ko Dak’s Mount Wellington restaurant.

By 2023, Song was running three restaurants himself, while also managing six franchised stores - he needed a dedicated preparation facility, and moved into a commercial kitchen in Onehunga.

“We were growing so quickly, we had to do a lot of work to reassure our franchisees that we could meet their demand for ingredients – to build up that trust,” Song said.

With nine stores now in operation - seven in Auckland and two in Tauranga - Song continues to look to expand.

A tenth franchise will open soon near Auckland Airport, and after the success of his franchises in Bay of Plenty, he’d also like to expand into other parts of the country.

Initially many of the franchises were taken up by Koreans, but Song has been working on translations and standardising his processes, so anyone can take up a franchise, whether or not they speak Korean.

He’s also been helped along, in terms of both finance and guidance, by his ANZ Relationship Manager Miki Lee.

“Communication is so important,” Song said. “Without her support, especially with the language barrier, it would have been a lot more difficult.”

The success of Ko Ko Dak comes despite ANZ Research data suggesting growth in the food and beverage industry stalled some time around the end of 2022.

Growth in the sector has remaining subdued over the past two years, with inflationary pressures and the increased cost of living likely limiting households' discretionary income.

“It takes courage and resourcefulness to start a business, and the past few years have been challenging for many,” ANZ Managing Director of Business Banking Lorraine Mapu said.

“Taking a careful look at the market for opportunities – as Ko Ko Dak did - and then coming up with a sound business model, can be the secret sauce.”

Ko Ko Dak started business in the wake of Covid-19, during a period between March and September of 2021, when a wave of small businesses - around 62,000 - were registered.

This was about twice as many as the same period in 2016 or 2018.

According to data from ANZ, gathered by DOT Loves Data, more than 92% of these startups are still operating two years later.

This compares to 90% of those started in 2018, and 86% of those registered in 2016, over the same two-year timeframe.

“Small businesses really are the backbone of our economy - when they do well, the whole country benefits - so it’s crucial they get the support they need.” ~ANZ Managing Director of Business Banking Lorraine Mapu

Ms Mapu said ANZ is supporting small business startups with the bank’s new HOWTWO support programme, which offers fee waivers, a check-in with a business banking specialist and access to in-depth insights during their first two years in business.

“Those insights include a market report from DOT Loves Data, with detailed information about the market they are operating in, to help with business planning.”

Meanwhile, Song remains focused on the future, and says his priority is simple – sharing the taste of Korean fried chicken with New Zealanders.

“I’m a proud Korean, and also a Kiwi,” he said. “So I’m excited to introduce Korean food to more New Zealanders, which will also help the local economy.”

One piece of advice he had for those starting a new business: do not become too fixated on profits during the early period.

Instead, he said, focus on refining your structure and processes – and never forget why you are doing it.

“We have a passion for good food – we love to eat it, we love to cook it, and we love to share it.”