In September 2021, a small bagel shop opened near Anguk Station in Seoul. Less than four years later, it became the centerpiece of a blockbuster deal that is shaking up the F&B industry. This is the story of London Bagel Museum. The news that private equity (PE) firm JKL Partners confirmed its acquisition for around ₩200 billion (approx. $150 million) surprised many. Beyond being just another “line-out-the-door bakery” success story, this M&A is a symbolic event, revealing how the standards for valuation and investment paradigms in the current F&B market are shifting.
Will London Bagel Museum’s success be a fleeting trend, or is it the dawn of a new F&B empire? By examining the context of this acquisition and comparing it to similar cases, we can get a glimpse into its future.
🥯 The Secret to a ₩200 Billion Valuation: An Experience Beyond the Bagel
London Bagel Museum Revenue and Operating Profit
2023–2024 (Unit: KRW 100 million)
To understand London Bagel Museum’s corporate value, one must look beyond the numbers on a financial statement. Its staggering performance in 2024—₩79.6 billion in revenue and ₩24.3 billion in operating profit—is only part of its strength. While an impressive operating profit margin of nearly 30% and a solid financial standing built without external investment are notable, JKL Partners wasn’t just betting on a “profitable bakery.”
What they essentially bought is an “irreplaceable brand experience.” London Bagel Museum is more than a place that sells delicious bagels; it offers a spatial experience that makes you feel as if you’ve stumbled into a London alley. From the vintage-inspired interior and English-only menus to the meticulously designed packaging, every element combines to create a powerful brand story, offering a unique charm you can’t find at other bakeries.
Ultimately, the ₩200 billion valuation is a testament to this potent brand power, a dedicated fanbase, and immense growth potential, given it still has only six domestic locations. In a saturated F&B market, a brand with such distinctive “scarcity” is an undeniably attractive target for investors.
🤝 The PE Formula and the Founder’s Touch: A Recipe for Success?
The union of a private equity firm and a founder often creates tension. The PE firm’s focus on financial performance and efficiency can clash with the founder’s vision to protect the brand’s identity—its “soul.” However, JKL Partners appears to be tackling these concerns head-on by choosing to partner with the existing management team, including founder and CBO (Chief Brand Officer) Lee Hyo-jeong.
Past F&B M&A deals offer clear lessons from both successful and failed collaborations.
A prime example of success is Gong cha, which took a leap forward after partnering with the PE firm UCK Partners. After acquiring Gong cha Korea in 2014, UCK Partners focused on localization, developing over 40 new menu items tailored to the Korean market. In a bold move, they then acquired the Taiwanese parent company in 2017, transforming the Korean branch into the global headquarters. This strategic expansion and the implementation of a systematic management system boosted the company’s value nearly sixfold in five years, leading to a successful exit.
On the other hand, some brands have seen their foundations crumble due to a focus on short-term profit maximization. Nolboo, once Korea’s largest Korean food franchise, experienced a painful failure after being acquired by Morgan Stanley PE in 2011. The PE firm recklessly diversified into businesses unrelated to Nolboo’s core competency in Korean food, such as coffee and snack foods. The excessive debt from these acquisitions subsequently crippled Nolboo’s financial structure. Having lost its brand identity and suffering from poor performance, Nolboo was eventually resold at a fraction of its original price 11 years later.
Mom’s Touch, once synonymous with “value for money,” also went through growing pains after a PE acquisition. Following its acquisition by KL & Partners in 2019, conflicts with franchisees erupted as the headquarters prioritized its own profits. Trust between the parent company and franchisees eroded over issues like rising ingredient costs and promotion disputes. The positive image of “Hyeja-burger” (a nickname for products offering great value) was tarnished, replaced by the moniker “Gyemo-touch” (a pun meaning “stepmother-touch,” implying stinginess). This internal strife ultimately weakened the brand’s competitiveness and complicated its sale.
These cases provide important insights for London Bagel Museum’s future. Its fate depends on the path JKL Partners chooses: will they, like with Gong cha, respect the founder’s vision and cultivate long-term brand value? Or will they, like with Nolboo and Mom’s Touch, get bogged down in short-term efficiency and lose the brand’s core essence?
⚖️ At the Crossroads of Trend and Classic
Like any success story, London Bagel Museum’s future is not without its shadows. The biggest risk is its “dependency on trends.” Countless F&B items, like tanghulu and Taiwanese castella cake, have faded away after failing to outlast their short trend cycles. With a high reliance on a single item—the bagel—there’s no guarantee the craze will last forever.
Furthermore, while the limited number of stores helps maintain the brand’s scarcity, it’s also a disadvantage for achieving “economies of scale.” Hasty expansion could easily lead to quality control failures and brand dilution, requiring a cautious approach.
Ultimately, for London Bagel Museum to achieve long-term success, it must evolve from a “hot fad” into a “beloved classic.” This will be a process of adding depth to the brand, not just increasing the number of stores. International expansion, backed by JKL Partners’ capital, could be an excellent strategy. With preparations already underway for entry into Japan and Singapore, the potential to grow beyond the domestic market into a global brand is certainly there.
📈 A New Formula for Success?
The acquisition of London Bagel Museum is more than just an M&A deal; it’s a crucial test case for whether a creative brand and smart capital can write a new formula for success. The combination of outstanding financial performance, powerful brand equity, and a partnership that respects the founder’s vision are all positive signs that raise expectations for success.
However, the formidable hurdles of shifting trends and intensifying competition remain. If JKL Partners and London Bagel Museum can avoid fixating on short-term results and pursue gradual, stable growth while preserving the brand’s essence, this acquisition is highly likely to be recorded as another meaningful success story in Korea’s F&B industry. All eyes are on whether the journey that began in Anguk Station can evolve into a legendary K-brand that captivates palates worldwide.