• The Korean Journal of Franchise Management
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• v.11 no.4
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• pp.45-57
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• 2020

Purpose: The purpose of this study is to determine the importance and priority arising from the relationship between MRO-office supplies franchisor ("franchisor") and franchisees through an in-depth investigation. In particular, with respect to the MRO-Office franchise industry, we would like to make meaningful contributions in the decision-making process by comparing and contrasting factors that affect the importance and priority of communication, conflict, support and satisfaction through AHP analysis. Research design, data, and methodology: After completion of AHP analysis, the study will also identify factors in order of priority and factors of importance between the franchisor and franchisees. Another purpose of this study is to evaluate and propose business relationship strategies between the franchisor and franchisees. Through AHP analysis, this study will facilitate the relationship between the franchisor and franchise, and determine the factors of importance and factors in order of priority. Result: This study evaluates the differences and priorities of the two groups arising from the relationship between the franchisor and the franchisees through AHP analysis after separately analyzing the franchisor. In this study, the franchisees find that communication is the most important factor, then support as the second most important factor between the two groups. In contrast, the franchisor finds that support is the most important factor followed by communication between the two groups. Conclusions: This analysis demonstrates the discrepancy in evaluating important factors from the perspectives of the franchisor and the franchisees. The largest discrepancy between the franchisor and franchisees comes from an information system related to communication factors. This effectively means that the franchisor has an understanding of this inadequate information system on the part of franchisees but this understanding is not deemed an important factor. The franchisees recognize and focus on the need to obtain feedback from the franchisor regarding management improvement as the most important factor rather than the ability of the franchisor to guide them through the franchisees' operations. To this end, the franchisor should be more flexible in dealing with the problem of improving the work required by the franchisees. For this study, a survey was conducted on employees of MRO-office supplies franchisor, franchisees, and employees and completed based on AHP analysis.

• Culinary science and hospitality research
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• v.14 no.2
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• pp.153-169
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• 2008

The purpose of this study is to determine the effects of production strategies operated by franchisors in the food service industry on the franchisees' culinary competence and subsequently franchisees' satisfaction with performance and recontract intention. In order to accomplish this purpose, two franchised enterprises which used mass-purchasing and mass-producing before distributing to each franchisee for the production strategies were participated and eventually 287 franchisees responded to this survey. Factor analysis and Cronbach's alpha showed the validity and internal consistency for the survey questionnaire. LISREL(8.72) was used to test the relationships between variables; production strategy, culinary competences, franchisee satisfaction, and recontract intention of the franchisees. The results present that the franchisees' satisfaction with the management system, quality of distribution, and quality of foods influenced on differentiation performance and supply performance of franchisees. On cost performance, only satisfaction with the food cost had an impact. The higher franchisee satisfaction with the franchisees' operations was, the higher recontract intention was in the franchise business. The results suggest the critical points for improving foodservice supplying system as well.

• The Korean Journal of Franchise Management
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• v.13 no.4
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• pp.23-37
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• 2022

Purpose: The Korean franchise market has undergone drastic growth in recent years. Followed by expansion of franchise business types, relevant legal matters have diversified. Compared to conventional economic laws that focused on resolving problems related to unfair transactions between franchisors and franchisees, more diverse labor laws have emerged recently due to governance and economic dependencies of franchise structure. However, it was found that the business environment of franchisees and working conditions of franchisee employees have not changed accordingly due to the unique structure of franchise business. Though franchisees are entrepreneurs independent from franchisors, they are still under franchising contract with the franchisors. For instance, employees of franchisees have been exposed to malpractices in regard to pay, time, and other working conditions. These malpractices may show the ineffectiveness of current labor laws. Labor management is an important issue for sustainability of franchise businesses. Negative publicity of franchises generated from violating relevant labor laws may have significant negative impact on overall image of franchised brands. However, franchisors should not hold franchisees fully responsible for legal violations in terms of labor management but strive to prevent relevant risks. Thus, the recent amendment in labor law related to increased minimum wage and reduced worktime have called for more attention to effectively implementing the law. Research design, data, and methodology: This study was conducted through a review of franchise-related laws and various institutions and policies. Results: It is further needed for all parties, including franchisors, franchisees, and franchisee employees, to take collaborative actions to improve working conditions of franchisees. Therefore, this study aims to propose appropriate and effective response plans toward recent changes in the Minimum Wage Act, while strengthening sustainability of franchisors, franchisees, and their employees. Conclusions: The proposal mainly contains plans regarding profit-related aids and profit sharing/cost reduction strategies for franchisees, as well as collective bargaining in the franchisor-franchisee relation. More detailed suggestions are included. Conclusions: This proposal may help franchisors and policymakers develop business plans and policies in improving business conditions of franchisees and working conditions of franchisee employees.

• Culinary science and hospitality research
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• v.11 no.4 s.27
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• pp.118-133
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• 2005

In the management activities of head office in supporting franchisees in domestic food-service enterprises, the raw material supply plays a positive role to support franchisees' operation activity and it comes into conflict with them at the same time. In this paper, I have tried to find out the relationship between raw material supplying and the satisfaction of the franchisees by experimental research in order to research the route of head office's raw material supplying. To sum up the results, it was found out there is no meaningful relationship between the raw material supplying and the franchisees satisfaction (intention to renew the agreement), It indicates it would be more effective for the franchisees to buy the raw materials from the suppliers developed by the franchisees except some key materials in order to reduce the conflicts with the franchisees.

• Culinary science and hospitality research
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• v.14 no.3
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• pp.69-84
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• 2008

The franchise business in Korea, having a relatively short history compared to those of the advanced countries, disclosed many problems between franchisors and franchisees due to a rapid growth in number for the short period of time. Having recognized these problems, the Korean government, responding to social demands, established "The Fair Trade Practices Law for Franchise Business" to restrict unfair trade practices and to develop a healthier franchise business practice in general. In this study, we closely examined how the franchisees' understanding of the related laws would influence the franchisees' countermoves and satisfaction and the franchisor's reactions from the franchisees' standpoints. In conclusion, the franchisees show higher satisfaction in heteronomous changes achieved by the mutual agreement with the franchisors rather than in autonomous changes achieved by their active pursuits, as seen from the interrelation of the franchisors' reactions and the appropriateness of franchise agreements.

• Journal of Distribution Science
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• v.12 no.4
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• pp.11-22
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• 2014

Purpose - The domestic franchise industry has made significant contributions to industry such as investment, employment, and community economy development, facilitating growth potential. The franchise industry provides management knowhow transfer between parent companies and franchisees as per contracts addressing use of business signs, franchisees' independent position, franchisor support, and royalties to be paid to the franchisors. However, many franchisors lack management knowhow and provide insufficient support because of poor control of franchisees and not having a systematic approach to support. This results in dissatisfied franchisees and failure to establish long-term relationships. Few studies have examined relational commitment and/or re-contract intention by support resources between franchisors and franchisees, despite a considerable output of theories and studies of the growth of the franchise industry. The purpose of this study, therefore, was to examine the effects of the ability to provide resources on relational commitments and re-contract intention, and to suggest causal relationships and implications. Research design, data, and methodology - The subject was domestic franchisors registered with the Association of Franchise with more than 50 franchisees. Franchisees under contract for 2 years and considering re-contract of their franchise 2 years later were used. The subjects totaled 300 franchisees in Seoul. A questionnaire survey was used to investigate the subject of franchisees' concessions during the 10 days from November 21, 2013 to November 30, 2013. After excluding 16 surveys with poor answers, 284 responses were finally used. Four areas and 44 questions were used. A nominal scale was used for four common characteristics questions including gender, ages, educational background, and franchise managing time. Questions regarding ability, relational commitment, and re-contract intention made use of a Likert 5-point scale. Data coding and data cleaning were used. SPSS 18.0 was used as follows. First, frequency analysis was done to investigate demographic characteristics. Second, exploratory factor analysis was done to verify validity of testing tools, and Cronbach's α coefficient was used to verify reliability. Third, correlation analysis and multiple regression analysis were done. An exploratory factor analysis was done to verify validity of concepts. A correlation analysis was done to test relationships between the variables, and multiple regression analysis was done to verify franchisor's ability, franchisees' relational commitment, and re-contract intention. Results - The following were the outcomes. First, store operation management, finance operation management, and human resource management affected the calculated bond. Second, store operation management and finance operation management affected the emotional bond. Third, store operation management, finance operation management, human resource management, and marketing management affected the prescriptive bond. Fourth, calculated bond and prescriptive bond had an effect on re-contract intention. Conclusions - As stated above, in franchise management, parent companies' offer and instruction of core competence to their franchisees as an information resource could improve the relational bond by helping them grow together through the resource sharing. Consequently, core competence factors were promoting factors that could improve franchisees' re-contract intention for a long time.

• Journal of Distribution Science
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• v.15 no.2
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• pp.47-51
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• 2017

Purpose - The purpose of the study was to find out factors having influence upon management of franchise convenience stores being distribution business by interview with franchisees in accordance with Delphi method and to investigate marketing strategy of increase income. Research design, data, and methodology - This study investigated not only franchisees but also head office's franchise consultants of convenience stores carefully by Delta technique to suggest actual solutions of practice and to be different from precedent studies. Delphi method's interview and questionnaire were used to investigate performance of franchisees. 120 franchisees were interviewed to consist of men and women. Results - FC visited franchise stores to investigate: Franchisees thought of keeping of exact information on commodity information and sales promotion events, and admitted of franchiser's effort of growth and development of stores and improper visit frequency of stores and low effort of solving of difficulty of franchisees. Conclusions - More than 80% of the franchisees cognized more than 70% of performance upon request of ordering from headquarters: Not only franchisees but also headquarters need to lessen gap of difference of cognition. Franchise headquarters was thought to give services below than common level, and service manual and operation manual were thought to be high. Headquarters need to give practical support service.

• Journal of Distribution Science
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• v.15 no.9
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• pp.37-52
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• 2017

Purpose - This study explores the influence of franchisors' supports on franchisees financial performance, overall satisfaction and intention to remain. Research design, data, and methodology - Given the exploratory design of the investigation, purposive sampling technique was used to select twenty-six (26) franchisees as key informants for this study. In-depth face-to-face interviews were conducted leading to generation of rich qualitative data on the phenomenon of support services in the Nigeria franchise system. Results - Results indicate that at both the initial and growing stages, training and management service supports have marked influence on franchisees business outcomes. However, findings revealed that at the initial stage, the impact of training is greatest but this impact subsequently declines as franchisees master the nuances of the business. Management services on the other hand maintains a constant relevance through all stages of franchisees business. Conclusions - Three key conclusions were drawn from the findings of this study. First, the quality of initial and ongoing supports have consequences for the long-term health of franchisees and franchisors' businesses. Second, poor management of franchisees' expectations and perception of supports could damage franchise partnerships. Third, franchisees form their expectation of supports largely from the nature of initial supports provided by the franchisors.

• 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.

• The Korean Journal of Franchise Management
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• v.12 no.1
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• pp.35-44
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• 2021

Purpose: This study examines the opportunism moderating effect by the startup experience in the relationship between franchisor and franchisees. In the case of a franchise system that has a continuous relational exchange transaction, relationship management is a very important activity because the relationship management between franchisor and franchisees improves the quality of the relationship. Nevertheless, there is insufficient of research on opportunism, which is a negative factor in managing the relationship between franchisor and franchisees in continuous relationship. Research design, data and methodology: This study, we explore the cause of opportunism based on transaction cost theory through prior research and establish a research model based by goal incongruity, uncertainty, information asymmetry, transaction specific assets, the relevance to determinant of opportunism and the startup experienced which is a moderating variable. To verify several hypotheses, the data were collected from 300 out of 1,760 domestic franchisees and analyzed using multiple regression analysis with SPSS program. Results: The findings are as follows. Goal incongruity did not affect opportunism. Opportunism increased as uncertainty increased, and as information asymmetry increased, opportunism increased. An opportunism decreased as transaction specific assets increased. Moreover, the findings show that startup experience only plays a moderating role in the relationship between information asymmetry and opportunism. Therefore, 4 out of 8 hypotheses were supported. Conclusions: The findings show that uncertainty, information asymmetry, and transaction specific assets are the determinants of opportunism. In addition, the results of the analysis of the moderating role of startup experience show that the less entrepreneurial experience, the greater the influence of information asymmetry on opportunism. Our findings mean that maintaining a successful relationship between franchisors and franchisees is possible when franchisors provide knowledge sharing, goal sharing, environmental sharing, and management information sharing to franchisees. In addition, the findings of this study shows that the contract content and management should be changed according to the entrepreneurial experience. In other words, the franchisors must share and integrate the accumulated franchisees' and franchisors' experience with the franchisees to create a synergy that can lead to successful bilateral relationship maintenance, which in turn reduces opportunism.