• Journal of the Korea Society of Computer and Information
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• v.23 no.10
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• pp.189-201
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• 2018

This study analyzed the effect of core competence of supervisor on the satisfaction, loyalty, business performance of franchisees and business performance of franchisor. And the purpose of this study is to solve the most problematic issues in franchise business such as poor sales of franchisee, inadequate measures for activating sluggish stores, closing rate increase of franchisee, dispute between a franchisee and franchisor. The results of this study will be used as data for the success of Franchisor's business operation and for the change and development of the franchise industry. In this study, 168 CEOs and employees in the franchise industry were surveyed. Through previous research and expert interviews, we designed the core competency factors of franchise supervisors into seven areas: check, consulting, coordination, promotion, counseling, communication, and control. In order to verify the hypothesis of the research, the relationship between variables was verified by simple regression analysis and multiple regression analysis. Key result of the study are as follows. First, the core competency of the supervisor has a positive relationship with the franchisee's satisfaction. Second, the core competence of the supervisor has a positive relationship with the franchisee's loyalty. Third, franchisee's satisfaction has a positive effect on loyalty. Fourth, franchisee's satisfaction positively affects the business performance of franchisee and franchisor. Fifth, franchisee's loyalty positively affects the business performance of franchisee and franchisor.

• Journal of Distribution Science
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• v.19 no.1
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• pp.17-26
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• 2021

Purpose: This research is to investigate the effect of the franchisee's basic psychological needs satisfaction on its business performance. Moreover, within the relationship between the franchisee's basic psychological needs satisfaction and its performance, the current study examined the mediating effect of work engagement and the moderating effect of the franchisor's support. Research design, data and methodology: 367 survey data were collected and analyzed using SPSS 22 and AMOS 22. For the assessment of goodness of fit of the models, fit indexes such as TLI, CFI, RMSEA were employed. Results: The results of the study are as follows: first, the franchisee's basic psychological needs satisfaction is positively related to performance; second, the franchisee's basic psychological needs satisfaction is positively related to work engagement; third, the franchisee's work engagement is positively related to performance; fourth, it is uncovered that the franchisee's work engagement mediates the relationship between basic psychological needs satisfaction and business performance; fifth, the moderating effect of the franchisor's support was insignificant. Conclusion: This study would like to contribute to the field of franchise performance, by re-assessing the significance of the individual's characteristics (of the franchisee) which has been ignored thus far. Furthermore, the limitations of the study and future research directions were discussed.

• Journal of Distribution Research
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• v.15 no.3
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• pp.1-34
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• 2010

Introduction The purpose of this research is to develop overall model which involves the effect of ongoing support services by franchisor on franchisee's relationship quality(trust, satisfaction, and commitment) and business performance(financial and non-financial performance), and to investigate the relationships among trust, satisfaction, commitment, financial and non-financial performance. This study also suggests franchise business or franchise system should be based on long-term orientation between franchisor and franchisee rather than short-term orientation, or transactional relationship, and proposes the most effective way of providing on-going support services by franchisor with franchisee thru symbiotic relationship among franchisor and franchisee Research Model and Hypothesis The research model as Figure 1 shows the variables on-going support services which affect the relationship quality between franchisor and franchisee such as trust, satisfaction, and commitment, and also analyze the effects of relationship quality on business performance including financial and non-financial performance We established 12 hypotheses to test as follows; Relationship between on-going support services and trust H1: On-going support services factors (product category & price, logistics service, promotion, information providing & problem solving capability, supervisor's support, and education & training support) have positive effect on franchisee's trust. Relationship between on-going support services and satisfaction H2: On-going support services factors (product category & price, logistics service, promotion, information providing & problem solving capability, supervisor's support, and education & training support) have positive effect on franchisee's satisfaction. Relationship between on-going support services and commitment H3: On-going support services factors (product category & price, logistics service, promotion, information providing & problem solving capability, supervisor's support, and education & training support) have positive effect on franchisee's commitment. Relationship among relationship quality: trust, satisfaction, and commitment H4: Franchisee's trust has positive effect on franchisee's satisfaction. H5: Franchisee's trust has positive effect on franchisee's commitment. H6: Franchisee's satisfaction has positive effect on franchisee's commitment. Relationship between relationship quality and business performance H7: Franchisee's trust has positive effect on franchisee's financial performance. H8: Franchisee's trust has positive effect on franchisee's non-financial performance. H9: Franchisee's satisfaction has positive effect on franchisee's financial performance. H10: Franchisee's satisfaction has positive effect on franchisee's non-financial performance. H11: Franchisee's commitment has positive effect on franchisee's financial performance. H12: Franchisee's commitment has positive effect on franchisee's non-financial performance. Method The on-going support services were defined as an organized system of continuous supporting services by franchisor for the purpose of satisfying the expectation of franchisee based on long-term orientation and classified into six constructs such as product category & price, logistics service, promotion, providing information & problem solving capability, supervisor's support, and education & training support. The six constructs were measured agreement using a 7-point Likert-type scale (1 = strongly disagree to 7 = strongly agree)as follows. The product category & price was measured by four items: menu variety, price of food material provided by franchisor, and support for developing new menu. The logistics service was measured by six items: distribution system of franchisor, return policy for provided food materials, timeliness, inventory control level of franchisor, accuracy of order, and flexibility of emergency order. The promotion was measured by five items: differentiated promotion activities, brand image of franchisor, promotion effect such as customer increase, long-term plan of promotion, and micro-marketing concept in promotion. The providing information & problem solving capability was measured by information providing of new products, information of competitors, information of cost reduction, and efforts for solving problems in franchisee's operations. The supervisor's support was measured by supervisor operations, frequency of visiting franchisee, support by data analysis, processing the suggestions by franchisee, diagnosis and solutions for the franchisee's operations, and support for increasing sales in franchisee. Finally, the of education & training support was measured by recipe training by specialist, service training for store people, systemized training program, and tax & human resources support services. Analysis and results The data were analyzed using Amos. Figure 2 and Table 1 present the result of the structural equation model. Implications The results of this research are as follows: Firstly, the factors of product category, information providing and problem solving capacity influence only franchisee's satisfaction and commitment. Secondly, logistic services and supervising factors influence only trust and satisfaction. Thirdly, continuing education and training factors influence only franchisee's trust and commitment. Fourthly, sales promotion factor influences all the relationship quality representing trust, satisfaction, and commitment. Fifthly, regarding relationship among relationship quality, trust positively influences satisfaction, however, does not directly influence commitment, but satisfaction positively affects commitment. Therefore, satisfaction plays a mediating role between trust and commitment. Sixthly, trust positively influence only financial performance, and satisfaction and commitment influence positively both financial and non-financial performance.

• Journal of Distribution Research
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• v.13 no.3
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• pp.101-125
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• 2008

This research suggests an ideal role between franchisee and franchisee for survival and development of the Korean franchise business by identifying causal relationships between entrepreneurship of franchisees and their business performance. Besides, when considering multi-dimensional features of a franchise system, this study aims to show that the market orientation of the franchisee and the relationship commitment between franchisee and franchisee will play an important mediating role to achieve a better business performance. Thus specific causal relationships among sub-dimensional constructs of entrepreneurship and market orientations were investigated. They are innovativeness, risk-taking propensity, pro-activeness, information creation, intelligence generation, intelligence dissemination, response design, response implementation. The results demonstrate that pro-activeness of franchisee plays a crucial role for franchisee's business performance. It was noted that franchisor's market orientation and innovativeness is also important for high market orientation of franchisor. The higher the market orientation of franchisor was, the higher relationship commitment of franchisee was formed. By identifying the mediation effect of relationship commitment and market orientation of franchisor, this paper showed that relationship commitment positively affect the improvement of franchisee's business performance. Above all, it should be noted that this research empirically identified the relationship between franchisee's entrepreneurship and business performance that most of the previous researchers have ignored. Furthermore, the analysis was conducted at sub-dimensional construct level. It is expected that empirical results from this study will be able to provide a meaningful framework and theoretical basis for future research on franchise, entrepreneurship and market orientation.

• Journal of Distribution Science
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• v.13 no.4
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• pp.65-76
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• 2015

Purpose - This article aims to present and test a model regarding franchisors' supporting activities that may positively influence franchisees' attitude toward the franchising headquarter and their own business performance. Moreover, the authors examine the moderating effect of competitive intensity between franchisee attitude and business performance. Most previous research focused on behavioral performance measurements such as satisfaction, trust, and commitment. There are few empirical studies that focus on financial performance data because it is difficult to determine a relational mechanism between behavioral and financial performance. Moreover, financial data is confidential and difficult to collect in many cases. However, this study measures financial performance (e.g., sales revenue per square meter) differently than most previous research, which is mostly focused on the behavioral performance measurements. Research design, data, and methodology - To test our hypotheses, we selected 137 franchisee managers who are running chains of one of the foremost bakery franchise brands in South Korea. This study carefully investigated the reliability, content validity, convergent validity, and discriminant validity of the proposed instrument by analyzing the data obtained from the samples. The data was analyzed using the AMOS structural equation modeling program. Results - The results indicated that: non-financial support activities (e.g., information exchange and communication) had a positive impact on the franchisee attitude toward the franchising headquarter. The franchisee attitude in turn had a positive effect on the headquarters' business performance. Furthermore, competitive intensity could enhance the relationship between franchisee attitude toward franchising headquarter and business performance in a local franchise market. However, financial support activities (e.g., rewards and promotional support) and training had no relationship with either franchisee attitude or business performance. Conclusions - This study provides some practical implications to franchisors in terms of franchise operation and store opening strategies. With respect to the franchise operation strategy, franchisors need to focus on non-financial rather than financial support. Most franchisees consider the necessity of financial support activities and not their sufficiency because these activities are specified in their franchise contract. In addition, it is important for franchisees to maintain a positive attitude for the franchise headquarters. The franchisees with a positive attitude for the franchisor can show a high degree of solidarity for various support activities, and it consequently determines franchisees' sales performance. In terms of franchise store opening strategy, this study suggests an additional criterion that can be considered in determining the location of direct and non-direct management stores (e.g., franchisees' stores). In this research, franchise stores located within high level of competitive intensity are shown to have a high relationship between franchisee attitudes of franchisor support activities and business performance compared to the franchisees located within low competitive intensity level. This result shows that opening non-direct franchise stores is more effective than direct stores in higher competitive market situations. Research contribution, implications, and further research directions are discussed at the end of the paper.

• Journal of Distribution Science
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• v.21 no.4
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• pp.81-89
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• 2023

Purpose: This study aims to analyze the effects of job satisfaction regarding the franchisee's continuous operation intention. In addition, it intends to investigate the mediating effect of work engagement in the relationship between job satisfaction and sustainable performance of the franchisee. Research design, data and methodology: 361 survey data were collected and analyzed using SPSS 24 and AMOS 24. To assess the model for goodness of fit, indexes such as TLI, CFI, RMSEA were used. Moreover, SEM method and bootstrapping were used for hypotheses testing. Results: The results of this study are as follows. First, the relationship between job satisfaction and the employee's continuous operation intention was significant. Second, it confirms that indeed job satisfaction positively affects work engagement. Third, it was found that work engagement had positive (+) effects on the franchisees' financial performance along with its continuous operation intention. Fourth, work engagement was found to mediate the relationship between job satisfaction and continuous operation intention of the franchisee. Conclusion: We found that job satisfaction of the franchisee is related with continuous operation intention through work engagement and financial performance. Hence, by demonstrating the empirical evidence which has been insufficient so far, this study contributes to the theory accumulation regarding the franchisee's continuous operation intention.

• Journal of Distribution Science
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• v.4 no.1
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• pp.141-160
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• 2006

The esthetic center skips over the dimension of simply theoretical knowledge by the specialization, segmentation, and gentrification and the importance of the technical education which introduced into the spot experienceis raising its head. And the esthetic center's importance which copes with the environment changing actively is being cognized. The franchisee system of esthetic shows that while the domestic market is opened, the appearance of foreign famous brand-centered is increasing rapidly. According to this kind of trend, every kind of mediums will not stop the classified ad of franchisee and it will be recognized as the promising sector. Especially, the situation of franchisee is that franchisors and franchisees in the limited relationship and just plan the growth, so the success possibly can be very high. The diffusion of franchisee system and the study about the franchisee are developed on the diverse view points. But still now, the study is just formed from the enterprise's success and the franchisors view point, the study about the franchisees dimension is very small. But it is also very important to exam the decision factors of franchisees success because the franchisors result of franchisee system will come out with franchisee performance totally. In this paper, it will actually proof if the decisive factors that exert influence on the franchisee performance in the franchisee dimension, exert influence on the franchisee performance in substance; and exam what kind of relationship the franchisee performance have with the franchisors and recontract intention. According to this, we can draw out the rest decision factors of improving the franchisee performance, and also show the strategic implication of franchisee efficient marketing.

• Journal of Distribution Science
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• v.16 no.4
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• pp.35-47
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• 2018

Purpose - This study seeks to find out the factors affecting the performance of franchisees from the franchisor's and franchise's intangible assets. In order to explain the process, this study explores the concept of LMX, Relational Capital, and Decision Rights Delegation. Research design, data, and methodology - To verify the proposed hypotheses, a questionnaire survey was conducted for franchise store owners, and to test the hypotheses, structural equation modeling was established. Results - First, franchisor's intangible assets affect the quality of LMX, but don't affect the relational capital. And the quality of LMX affects the relational capital. In addition, "the effect of delegation of decision rights on relational capital" and "the effect of relational capital on franchisee's performance" were significant. However, the effect of delegation of decision rights on franchisee's performance wasn't significant. Second, the intangible assets of the franchise have a positive effect on the quality of the LMX and the degree of delegation of decision rights, and the quality of the LMX has a positive effect on the delegation of decision rights. Conclusions - This study would suggest operational implications for the formation of vertical and horizontal relationships and the cooperation between the main members of the franchise business.

• Journal of Distribution Science
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• v.12 no.12
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• pp.119-130
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• 2014

Purpose - Franchise industries are significant both socially and economically. However, with increasing interest, there are manifold problems. It is necessary to seek measures for mature operation constantly despite unprepared franchisors, negative perceptions of the media and society toward franchise, and rapid changes in business start-up trends and propensity to consume that make business start-ups difficult. The paper aims to explain the effects of relational commitment and performance on the franchisor's management characteristics and justice in the food service franchise system. Research design, data, and methodology - This is an exploratory survey examining franchising in Korea. Based on a literature synthesis, we extract five constructs: managerial characteristics, support, fairness, trust, and satisfaction. We hypothesize that these factors influence the trust, satisfaction, and performance of franchisees. To examine these hypotheses empirically, we conducted a survey on the database of the Franchising Council of Korea. The study employs data from May to September 2014. In total, 135 completed questionnaires were received, of which 128 were usable. The data was analyzed with SPSS/PC 22.0. First, to test unidimensionality and nomological validity of the measures of each construct, we employed a scale refinement procedure. The result of a reliability test with Cronbach's α and factor analysis warranted unidimensionality of the measures for each construct. In addition, nomological validity of the measures was warranted from the result of the correlation and regression analysis. By analyzing the data, we can confirm most hypotheses. Results - Frist, franchisor characteristics have a positive effect on trust and satisfaction. Second, franchisor fairness has an effect on trust and satisfaction. Third, franchisor support has an effect on satisfaction. Further, the franchisee trust has an effect on satisfaction. Fourth, the satisfaction of a franchisee with a franchisor affects the performance of a franchisee. Finally, there is a possibility that not only franchisee performance but also increasing the credibility and improving the image of the franchisor through communication between franchisor and franchisee can improve franchisees' performance and satisfaction by motivating the franchisee for sustainable growth. Franchisers should endeavor for franchisees to obtain stable revenue with continuous and practical support. They should recognize that they can expand their business by supporting their franchisees. Franchisors should not only instantly respond to franchisees' troubles with interactive communications but also raise the ability of supervisors for better support. Franchisors should share their visions and goals with their franchisees and provide systematic and continuous support based on trust and clear company management. Franchisees should understand franchisors' position as well as participate in establishing the basic franchise system. Contributions - The paper contributes to understanding franchising in Korea. It offers insights and assistance to franchisors hoping to start franchises. This paper explores measurement issues related to franchisee performance by estimating its determinant factors (managerial characteristics, support, fairness, trust, and satisfaction). This study provides franchisors and practitioners planning to extend their franchising business with some practical knowledge.

• Asia-Pacific Journal of Business Venturing and Entrepreneurship
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• v.6 no.1
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• pp.39-58
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• 2011

The Study on the Influence of Selection factors of Franchise System and Franchisee's Satisfaction in the Food Service Franchise Industry. Franchisors can use franchisee selection criteria as a key input control to enhance the outcomes of their future franchisees. A business technique based on long term contractual arrangements between two legally independent businesses and relying on certain inputs from both parties for success and survival has significant potential for conflict. Furthermore,with many independent small businesses falling to reach their full potential, it is important to evaluate franchising as an alternative system of business management and to identify the characteristics of franchisor and franchisees which contribute to the satisfactory operation of a franchised small business. Thus, the objective of this study was to investigate a possible relationship between franchisee satisfaction and certain characteristics of the franchisor and of the franchisees themselves. In accordance with results of a hypothesis verification, a Selection factors of Franchise affects positively a Franchisee's Business Satisfaction.