KFC Korea is embarking on a franchise expansion strategy to accelerate its growth. The popular fast food chain plans to expand its presence in South Korea, including the introduction of smaller, cost-effective franchise locations. This initiative comes as KFC prepares to celebrate its 40th anniversary in the Asian market next year.

This decision stems from Orchestra Private Equity’s master franchise agreement with KFC’s parent company, Yum! Brands, which was established in January of this year. At that time, the Seoul-based private equity firm acquired a 100% stake in KFC’s domestic operations for 60 billion won ($44.5 million) from Korea’s KG Group.

Currently, the U.S. parent company directly oversees approximately 200 KFC locations in Korea through a company-owned system. In contrast, other major fast food chains in the country, which employ both company-owned and franchise systems, operate a larger number of outlets. Local burger franchise Mom’s Touch & Co. and Lotte Group’s fast food chain Lotteria manage around 1,400 and 1,300 locations, respectively. McDonald’s and Burger King each run around 400 and 470 outlets, respectively.

Franchise management offers a cost-effective approach and can rapidly boost the number of franchise outlets, in contrast to the less cost-effective company-owned system, according to insiders in the food and beverage industry.

Furthermore, KFC Korea is planning to expand its portfolio of small-box stores, which require less floor space compared to traditional outlets. These redesigned restaurants will enable more franchisees to start their businesses with lower costs, especially in smaller cities with smaller populations. KFC’s Korean operation recently opened its first small-box store in Seoul, with two more set to launch in the capital by the end of this year.