The McDonald’s outlet at exit 3 of Sinchon Station in Seoul will close for good next month.

The specific move out date has yet to be decided, but the company said the closure was confirmed.

“The decision is final. There will be no taking it back,” a McDonald’s representative familiar with the matter told The Korea Herald.

The Sinchon branch served as a landmark meeting spot in the area. In the 20 years of the shop’s history since opening doors in 1998, it wouldn’t be an understatement to claim that almost all Yonsei University students had eaten there at one time or another. 

Many members of the public expressed regret via online platforms regarding McDonald’s decision to pull the plug on the iconic branch.

“It isn’t because the sales were lackluster at the store, but more because of the rise in the rent that has hampered the outlook for profits expected from the shop,” the representative said. “The branch is indeed a symbolic one, but that shouldn’t be a deciding factor for a business call. (Korea’s) first-ever McDonald’s in Apgujeong has also been gone for some time now, too.”

The shop nearer to the Yonsei University’s front gate will stay open.

However, the Seoul National University branch, Sadang branch, the branch in Busan’s youth hangout area of Seomyeon and the Dankook University branch in Yongin, Gyeonggi Province, are also closing down this month. All the shops that are closing this time were operated directly by the headquarters.

The administrators of the building in which the Sinchon branch is located reportedly told the Korea Economic Daily that the rent it had taken from the McDonald’s store was below the market rate.

The two parties agreed to cease their arrangement as they were unable to reach a compromise on a rent increase.

The Sinchon branch had 100 to 150 part time workers. The rise in the minimum wage from 6,470 won to 7,530 won ($7) this year was also a factor in the decision, McDonald’s said.

The McDonald’s representative said that shedding and restructuring branches is a natural course of business that takes place every year.

McDonald’s currently has 448 branches nationwide in Korea. In 2000s, the chain added 40 to 50 stores each year, but the expansion has slowed in recent years. The company opened just two new stores in 2016 and 11 in 2017.

McDonald’s noted changes in the Korean youths’ eating habits, as there are now more options for budget-conscious university students and teenagers.

McDonald’s said it was moving away from two or three-story stores in expensive areas and plans to expand its number of drive-thru stores aimed at families and car owners.

Of the McDonald’s stores in Korea, 252 are drive-thru branches. These branches, located in the outskirts of towns, have lower rents and reap 30 to 40 percent higher profits compared to the urban stores of the same size, according to the company.

The first McDonald’s restaurant in Korea launched in Apgujeong, southern Seoul, in 1988. The US fast food giant saw an explosive growth around the end of 1990s, with the branch in Sinchon remembered as one of the symbolic stores that greatly contributed to the boom.

By Lim Jeong-yeo (kaylalim@heraldcorp.com)