• The Journal of Industrial Distribution & Business
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• v.3 no.2
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• pp.17-21
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• 2012

Purpose - The objective of the paper is to explain the factors affecting on the Re-contract intension of franchisor in the uprising Chinese franchise market. Research design, data, methodology - The study conducted a survey on the 400 franchisors data in China from January to July 2012. By AMOS analyzing the data to examine these hypotheses empirically, we can confirm most hypothesis supposed. Results - This study shows that the high management performance and satisfaction of the franchise headquarters has a positive effect on the Re-contract intention of franchise. In the case of large markets such as China, the franchisor's strategy and the role is very important. Conclusions - This study provides franchisors and practitioners, who plan to extend their franchising business abroad into Chinese market, with some practical knowledge. in order to achieve stable profits, the franchise corporation needs to support the operation of the individual franchisee through incentives and standardization of services.

• Journal of Distribution Science
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• v.12 no.8
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• pp.43-54
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• 2014

Purpose - This study was based on a theoretical consideration of the structural relationship between the support and control of the franchisor and the satisfaction and strategic response (voice, loyalty, exit, neglect) of the franchisee. First, based on the preceding research, this study systematically organized the type of support and control of the franchisor. Second, the study examined the effects of a franchisor's support and control on the expectancy disconfirmation between affiliated franchisees' expectations before a franchise agreement and performance after operating an affiliated store. Third, the study looked into the effects of expectancy disconfirmation relating to a franchisor's support and control on an affiliated franchisees' general satisfaction. Fourth, this study examined the influence of the general satisfaction of a franchisee on affiliated franchisees' response strategies. Research design, data, and methodology - In this study, the population comprised the nation's franchisors, and the sample comprised franchisees conducting business in Seoul and Gyeonggi-do. A self-administered questionnaire was used; the author and examiner explained the study's parameters to the interviewees in advance, to lessen the rate of rejection of the answers and to maintain reliability. The author distributed 350 copies of the questionnaire and collected 327 copies (93.4%). The author removed 54 copies of the sample, as these copies belonged to franchisees that were not registered by the Fair Trade Commission and/or were thought to have either defects or inadequate answers. The author selected an effective sample of 273 copies to enter data and to do the statistical analysis. Results - Both a reliability analysis and a confirmatory factor analysis were performed to measure reliability and validity, and a structural equation model was used to conduct the hypothesis test and investigate the models. The hypothesis was tested (Table 5). The models had a suitable fit, for instance, χ² = 447.663(df = 212, p = .000), χ²/df = 2.112, GFI = .881, AGFI = .858, RMR = .083, RMSEA = .067, NFI = .932, and CFI = .961. The hypothesis test results were as follows. Hypothesis 1 was accepted (C.R. = -2.339, p = .019). Hypothesis 2 was accepted (C.R. = 15.213, p = .000). Hypothesis 3 was accepted (C.R. = -2.631, p = .006). Hypothesis 4 was accepted (C.R. = 16.271, p = .000). Hypothesis 5 was accepted (C.R. = 2.391, p = .017). Hypothesis 6 was accepted (C.R. = 5.777, p = .000). Hypothesis 7 was accepted (C.R. = 17.153, p = .000). Hypothesis 8 was accepted (C.R. = 24.746, p = .000). Hypothesis 9 was accepted (C.R. = -10.150, p = .000). Hypothesis 10 was accepted (C.R. = -12.124, p = .000). Conclusions - The research results showed that expectations for a franchisor's support and control had a significant influence on expectation disconfirmation in a negative way, whereas the performance of support and control were found to have a significant influence on expectation disconfirmation in a positive way. In addition, the expectation disconfirmation of support and control was found to have a significant influence on satisfaction of franchisees in a positive way. Generally, regarding the research on control, control is found to have a negative influence on the satisfaction of franchisees, but this study proves that control is found to affect it in a positive way through conformity.

• The Korean Journal of Franchise Management
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• v.14 no.3
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• pp.37-52
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• 2023

Purpose: This study is to investigate the causal relationship between franchise headquarters' franchise cost and franchise satisfaction and management performance, and to verify the structural relationship between franchise cost and corporate permanence. Research design, data and methodology: The data were collected from 200 medium-sized franchisees in Seoul and analyzed using confirmatory factor analysis (CFA) to test the validity of the measurement model and the structural equation model (SEM) to identify the impact of franchise costs on corporate performance with the Amos 28.0 program. Result: Franchise costs were found to have a negative effect on franchise satisfaction and corporate permanence. It was confirmed that franchise satisfaction had a significant positive effect on management performance and corporate permanence. Franchise costs had a sequential mediating effect on franchise satisfaction and management performance, which had a significant impact on corporate permanence. Conclusions: This study expanded the theoretical scope by applying the expectation confirmation theory to corporate transactions. In addition, the franchise headquarters proposes ways to create a culture of franchise business with trust by presenting appropriate franchise costs to improve management performance and corporate permanence through franchise satisfaction.

• Asia-Pacific Journal of Business Venturing and Entrepreneurship
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• v.12 no.3
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• pp.177-190
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• 2017

This study investigates the effects of franchisors' characteristics including brand reputation, training and product related support, franchisees' characteristics including store location and management on the performance and recontract intention of franchisees in bakery franchise industry. Also, this study examine the moderating effect of CEO experience of franchisees among the franchisors' and franchisees' characteristics, and performance. To empirically test these relationships, data were collected from 386 respondents who are franchisees in the bakery franchise sector. In the verification of hypotheses, the structure equation modeling(SEM) is used. The results of this study are as follows. First, franchisors' brand reputation, training support, and franchisees' locational factor have significant effects on the financial performance of franchisees positively. However, franchisors' product related support and franchisees' management of the store have not significant effects on the performance. Second, the performance of franchisees has positive effect on the recontract intention. Third, the moderating effect of CEO experience is only significant in the relationship between franchisors' training support and the performance. Based on the findings, this study suggest the importance of building a good brand image and superior training system for franchisors to improve mutual ongoing growth. Also, franchisors should determine whether nascent franchisee entrepreneurs have CEO experiences to further improve performance. If they do not have related experiences, both opening and ongoing training supports of franchisors and the efforts of franchisees towards learning are required. Finally, this study suggest that both franchisors and franchisees should accurately analyze the conditions of possible locations and establish strategies to select beneficial location before starting a franchise business.

• Asia-Pacific Journal of Business Venturing and Entrepreneurship
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• v.16 no.3
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• pp.121-143
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• 2021

As the social economy emerges as one of the alternatives for solving social problems, interest and experiments on social franchise, a methodology for scaling the social economy, continue to increase. The success or failure of social franchise has a huge impact on franchisors, members of franchisees, as well as beneficiaries, local residents, and stakeholders in the region, but research on ways to increase their chances of success is still insufficient. Based on previous studies, this study tried to derive success factors by analyzing the effects of social franchise characteristics on business performance, and to understand the mediating effect of franchise autonomy, which is the differentiation point of social franchises, between characteristic factors and business performance. Social value orientation, social economy experience, local network utilization, and customer orientation were derived as characteristic factors affecting business performance, and franchise autonomy was set as a mediating variable, and a survey was conducted for franchisee members and their influence was analyzed. Through this study, it was found that social economy experience and local network utilization had a positive (+) effect on economic performance, and social value orientation, local network utilization, and customer orientation had a positive (+) effect on social performance. Also, the results of franchise autonomy playing a mediating role between social economy experience, local network utilization and economic performance, and a mediating role between local network utilization and social performance were presented. This study has significance as the first study to conduct a full-scale empirical study on social franchises. It is hoped that theoretical research on social franchises will be more active in the future and will be used as a useful reference for performance creation for organizations that seek or already operate social franchises.

• Culinary science and hospitality research
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• v.19 no.1
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• pp.57-69
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• 2013

This study analyzed the effects of the relational norm factor of food service franchising on the intention to remain, in view of the importance of relational norms, as antecedent variables, to franchisees' perceived fairness to enhance the competitiveness by formation of long-term relationship between interested parties to food service franchising, the franchiser and the franchisee. According to a questionnaire survey, more than 100 franchisees that recorded three business years in Seoul, Incheon and Gyeonggi area were selected for convenience sampling. Then, among them, 515 effective samples were analyzed. For statistical data, detailed types of analysis were performed by using AMOS 17.0, such as factor analysis, exploratory factor analysis, confirmatory analysis and frequency analysis. The purpose of this study was to examine the relationship between the franchiser and the franchisee by arranging relational norm factors for the relationship to be suitable for the current situation of Korea, instead of Western-style theory-based relationship marketing, and by understanding a connection between perceived fairness and management achievement-related variables, and to make a conceptual framework for building a positive relationship between the franchiser and the franchise in future food service franchising industry. Moreover, it aimed to increase franchisee satisfaction and results including re-contract according to perceived positive relationship value on the franchiser and to make contribution to find and show the proper direction for development of the Korean-style food service franchising system.

• Journal of Distribution Research
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• v.10 no.2
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• pp.27-47
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• 2005

This study is basically focused on the relationship between the franchisors and franchisees. The goal of this study is mainly to inquire the variables of relationship characteristics affecting the commitment which lies in internal polity, and secondly to comprehensively analyze the performance resulting from commitment and examine the efficient alternatives onto relationship management. The practical methodology using in this study has been done in a national representing food franchise system. This study has been resulted in following: First, the variables that show significantly to the commitment are noncoercive influential strategy, dependence, cooperation, and goal divergence. In the contrast the coercive influential strategy hasn't showed significantly; Second, the result has showed that the commitment when it would be related with performance furthered the financial performance and role performance; and. therefore, we finally conclude that it would be more important to make lots of efforts of establishing the win-win relationship through the long-term commitment between the franchisor and franchisee in order to develop the more effective relationship of the franchise system.

• The Korean Journal of Franchise Management
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• v.10 no.2
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• pp.19-32
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• 2019

Purpose - This paper aims to investigate the mediating effects of relationship fairness factors between franchisor's support services and performance(re-contract intention) in food service franchise. More specifically, fairness was measured into distributive, procedure, interaction, and information, franchisor's support service was divided into pre-start support services (initial support services) and post-start support services (continued support services), and performance (re-contract intent) was measured using 3 items such as re-contract, contract extension, and recommendation. Research design, data, and methodology - The population for the survey is the head of franchises in the metropolitan area (Seoul/Gyeonggi), which operates a restaurant franchise, and samples included a wide range of overseas/domestic brands and regions. The survey was conducted from August 1 to September 30, 2018 through the survey agency. The survey was conducted together with a telephone interview and a direct visit by the investigator. A total of 205 questionnaires were collected and retrieved, 4 questionaires containing missing information were excluded and 201 responses were used for analysis. Results - The results shows that franchisor's initial support services have significant positive effects on procedural, interpersonal, and informational relationship fairness, and continuous support services have significant positive effects on distributive, procedural, interpersonal, and informational relationship fairness. This study also shows that informational and procedural fairness have significant positive effects on performance(re-contract intention). Finally, continuous services a significant positive effect on performance(re-contract intention). Conclusions - The results show that franchisor make a manual, and should improve fairness through regular investigation whether support services was executed as promised in the manual after franchisee operation. In addition, information fairness and procedural fairness have been shown to increase performance(re-contract intention). These results mean that the franchisor's headquarters should provide product and service support for the merchant in accordance with the manual and management policy to reduce asymmetry in information and improve procedural fairness to enhance performance(re-contract intention).

• Journal of Distribution Research
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• v.10 no.1
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• pp.107-122
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• 2005

The purpose of this research is to find out what factors have an effect on the retailer's performance. Most of the former researches in the similar fields performed their study based on the customers reasons for revisiting or store loyalty. But this research has been done not based on the customer but based on the retailers. It means that the data was collected from individual retailer. Considering the former research and characteristics of the franchisee retailers, size of temporal population around the retailers, visibility of the retailer, competition situation, out-door promotion, street shelf, size of the retailer were selected as factors affecting on the retailers performance. As a performance variable, number of visitors happened to observation period. Data collection was performed through the observation of the retail circumstance and interview with the retailers owner. As meaningful variables affecting on the retailers performance, size of temporal population around the retailers, visibility of the retailer were found in the 5% significance level, and out-door promotion, street shelf, size of the retailer in the 10% significance level, whereas competition situation did not have effect on retailers performance. Finally, we discuss several theoretical and practical implications, and suggest limitations for the research and future research issue.

• Journal of Global Scholars of Marketing Science
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• v.19 no.2
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• pp.40-52
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• 2009

Franchising is one of the fastest growing types of business. It is already popular and well-known in the U.S., and has been growing in many other countries including Korea. Furthermore, many Korean franchising companies have expanded their business overseas actively. According to the data by the Ministry of Industry and Resource, 82 companies out of a sample of 500 franchising companies are already operating in many foreign countries and 48% of them have started their foreign business since 2006. This clearly indicates the fast growing current trend of foreign operation by Korean franchising companies. In spite of the fast growing trend of foreign expansion in the industry, academic research on internationalization of franchising companies is extremely difficult to find. Accordingly, academic research on the issue is necessary and urgent in Korea. Among the various research questions on internationalization of franchising business, this study intends to investigate the difference in organizational factors between the franchising companies doing foreign operation and those doing business only domestically. More specifically, this research has the following purposes. First, considering the lack of theoretical basis of previous studies, resource-based theory and agency theory are employed as the theoretical bases. Second, this study explains the difference in internationalization based on organizational factors such as company size, history and growth rate. Third, the five hypotheses regarding the difference in organizational factors are presented and tested empirically, which is the first attempt in the area of this topic. Finally, the study attempts to clarify the conflicting implications among theories regarding some organizational factos such as growth rate. As the theoretical background, resource-based theory and agency theory are discussed. According to resource-based theory, a firm can grow continuously when it has competence and resource, and also the ability to develop them. The competence and resource can include capital, human resource, management skill, market information, ability to manage risk, etc. Meanwhile, agency theory views the relationship between franchisor and franchisee as an agency relationship. In agency theory, bonding capability and monitoring capability are the two key factors which promote internationalization of franchising companies. Based on the two theories, a conceptual model is designed. The model consists of two groups of variables. One is organizational factors including size, history, growth rate, price bonding and geographic dispersion. The other is whether a franchising company is operating overseas or not. We developed the following five research hypotheses basically describing the relationship between organizational factors and internationalization of franchising companies. H1: The size of franchising companies operating overseas is larger than that of franchising companies operating domestically. H2: The history of franchising companies operating overseas is longer than that of franchising companies operating domestically. H3: The growth rate of franchising companies operating overseas is higher than that of franchising companies operating domestically. H4: The price bonding of franchising companies operating overseas is higher than that of franchising companies operating domestically. H5: The geographic dispersion of franchising companies operating overseas is wider than that of franchising companies operating domestically. Data for the analyses are obtained from 2005 Korea Franchise Survey data co-generated by Ministry of Industry and Resource, GS1 Korea, and Korea Franchise Association. Out of 2,804 population companies, 2,489 companies are excluded for various reasons and 315 companies are selected as the final sample. Prior to hypotheses tests, validity and reliability of the measures of size, history, growth rate and price bonding are examined for further analyses. Geographic dispersion is not validated since it is measured using nominal data. A series of independent sample T-tests is used to find out whether there exists any significant difference between the companies internationalized and those operating only domestically for each organizational factor. Among the five factors, size and geographic dispersion show significant difference, growth rate and price bonding do not reveal any difference and, finally, history factor shows conflicting results in the difference depending on how to measure it.