• 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 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 Arbitration Studies
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• v.30 no.4
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• pp.139-161
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• 2020

In this study, the factors affecting opportunism that causes conflict in the franchise system between franchisor and franchisee were analyzed based on the transaction cost theory and power-dependency theory. Hypothesis 1 states that franchisor support will negatively affect opportunism. Hypothesis 2 expresses that franchisee transaction-specific investment on the relationship with the franchisor will positively affect opportunism. Hypothesis 3 asserts that franchisee dependency on the franchisor will positively affect opportunism. All of these were supported. However, Hypothesis 4, maintaining that franchisee competitive intensity will positively affect opportunism, was not supported. The theoretical and practical implications of this study are as follows. This study has identified the antecedents of franchisor opportunism that causes conflict in the franchise system by comprehensively applying the transaction cost theory and power-dependency theory. This study can also identify what a company should manage specifically to lower opportunism by identifying the antecedents of franchisor opportunism in the franchise system. The limitations of this study and the directions for future studies are as follows. First, not all of the antecedents of franchisor opportunism in the franchise system have been extensively investigated from the transaction cost theory's and power-dependency theory's viewpoint. In the future, it is necessary to identify additional factors. Second, the study was conducted only from the franchisee's perspective. In future studies, more accurate research results can be obtained by simultaneously examining the franchisee's point of view and the franchisor's point of view.

• Culinary science and hospitality research
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• v.10 no.4
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• pp.96-117
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• 2004

The purpose of this study was to find relationship of satisfaction factors between franchisor and franchisee, and to examine the effects on satisfaction with franchisee in foodservice industry. Through the prior study, instrumental and relational factors were adapted as independent variables, and satisfaction variables were selected as dependent variables. The survey was administered to 346 franchisor possessing over 30 franchisees at Dae-gu metropolitan area, and analyzed by SPSS 10.0. The results of analysis were examined through the multiple regression analysis.

• Journal of Arbitration Studies
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• v.13 no.2
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• pp.321-351
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• 2004

According to increase of Franchise Agreements, troubles related to those agreements and trading acts occur frequently. As Franchise system had come from Western countries, franchise agreement troubles tend to international disputes. In fact, those parties entered into a franchise agreement prefer arbitration to lawsuit as a dispute resolution system because arbitration is easy to risk-management for cost and time. The essential conditions for Franchise agreements are as follows ; for Franchise to grant Intellectual Properties to Franchisee, to give an impression of the same company between Franchise and Franchisee, to control and support Franchisee, for Franchisee to be an independent merchant, and to pay Franchiser license fee. Because Franchise Agreement is also based on liberty of contract, Franchise and Franchisee could enter into any kind of agreement. However, Franchiser can make an unfair agreement abusing a position of advantage. This paper check those unfair terms and conditions in Franchise agreement. Once they enter into an agreement, they should fulfil their contract. In case of trouble on performing the contract, both of them have to discuss to solve that trouble faithfully. But, they enter into either lawsuit or arbitration in accordance with agreement when they can't reach a decision in general. Specially, which is the most popular dispute resolution hands in case of Intellectual Property License agreement. General international Franchise Agreements have arbitration terms, but there is other case such as separate Arbitration Agreement if the want, which is separate from Franchise License agreement, so even though Franchise License agreement is invalidated, Arbitration agreement continues to exist, This paper reviews Franchise system and the terms of arbitration in Franchise agreement.

• 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 Digital Convergence
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• v.6 no.2
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• pp.77-86
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• 2008

This study investigated how the franchisor's supportive activities influence the franchisee's loyalty and consequently their perceived performance in the franchised restaurants. The study found that the franchisor could increase the franchisee's loyalty through supportive activities and the franchise performance in results. However, the franchisor's advertising and promotion supports did not influence the franchisee's loyalty increase, but increase the franchisee's perceived performance. In summary, supportive activities such as efficient franchise system and advisory activities could be a starting point towards high franchise performance.

• Journal of Distribution Science
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• v.15 no.2
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• pp.91-100
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• 2017

Purpose - Domestic franchise market has been grown steadily, reaching 50 trillion won in sales and 3,360 franchise headquarters in 2014. A franchise system is an effective business system for the franchisees to lower the failure rate due to the fact that the inexperienced entrepreneurs are supported by their headquarters through the franchisee contract. However, there are also conflicts between franchiser and franchisee behind the quantitative growth of domestic franchise industry. Therefore, it is very important to structure the causes of conflicts and to examine the effect of factors on the relationship commitment and performances. Research design, data, and methodology - In this study, the author divides the composite incompatibility between the franchise and the franchisee into goal incongruity, domain dissensus, and perceptual differences, and examines each dimension to the relationship with commitment and performances. To verify the proposed research model and test hypotheses, the author selected 200 franchise responses in food and beverage industry. The data were analyzed using SPSS 18.0 and AMOS structural equation modeling program. Results - The empirical findings provide goal incongruity and perceptual differences have a negative effect on the affective commitment, but not the calculative commitment. In addition, affective commitment and calculative commitment are found to have a positive effect on re-contractual intention and extended brand shop running intention, respectively. Affective commitment have a stronger effect on re-contractual intention than calculative commitment. Conclusions - First of all, the fact that goal incongruity and perceptual differences negatively affect the affective commitment, but it does not affect the calculative commitment. It means the relationship commitment in distribution channel are multi-dimensional concept that may be attributed to emotional or affective dimensions but may exist in terms of necessity or power-dependence. Second, the level of relationship commitment such as affective and calculative commitment to franchise headquarters positively affects the re-contractual intention and franchiser's extend brand shop running intention suggest that franchiser should encourage and support existing franchisee's commitment. Third, the fact that affective commitment has a greater effect on relationship performance than calculative commitment means to induce franchisee's affective commitment and to prevent the inconsistency between goals and perceptual differences.

• Journal of Distribution Research
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• v.4 no.1
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• pp.161-183
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• 1999

The purpose of this paper is to investigate the fastfood franchise distribution channel in the Pusan area. To achieve the research objectives, hypotheses were developed through a literature review and an experimental methods wee employed. The major findings of this study are as follow; (1) franchiser's control and autonomy positively affected the affective commitment of franchisee. (2) franchisee's affective commitment positively affected the performance. (3) franchiser's control positively affected the performance of franchisee. Therefore, the efficient franchise system and relationship are required in the Korean distribution channel.

• Asia-Pacific Journal of Business Venturing and Entrepreneurship
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• v.13 no.5
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• pp.87-102
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• 2018

The purpose of this study is to determine the impact of food service franchise's support system on franchisee's trust, financial performance and intention of multi-store operation. For this purpose, the results of the survey were collected for 111 small and mid-sized food service franchisees in Korea with less than 100 brand franchises, referring to article 9 of the act on Fair Trade. Structural equation model analysis was used for hypothesis testing. The results of the study are as follows; First, a support for store development, education, logistics, and supervisors among franchise's support system were found to have a significant impact on the franchisee's trust, but public relations support was not significantly affected. Second, a support for store development had significant influence on the financial performance, but the support for education, logistics, supervisors and public relations did not significantly affect the financial performance. Third, franchisee's trust has been shown to have a significant impact on financial performance and intention of multi-store operation. Fourth, financial performance was shown to have a significant impact on the intention of multi-store operation. Finally, confirming the mediated effects of financial performance on the effect of franchisee's trust and intention of multi-store operations also proved to have indirect effects. This study identified the impact relationship between the small and medium-sized food service franchise support system, franchisee's trust, financial performance and intention of multi-store operation. In particular, it is deemed meaningful that the performance of Korea's small and medium-sized food service franchises and the relationship of influence that can grow together through the qualitative growth of the franchise's system.