The Korean Journal of Franchise Management (한국프랜차이즈경영연구)

Korea Society of Franchise Management (한국프랜차이즈경영학회)
권호 표지
DOI QR코드

DOI QR Code

The Impact of Franchise Costs at Franchise Headquarters on Corporate Permanence: The Sequential Mediating Effect of Franchisee Satisfaction and Management Performance

프랜차이즈 본부의 가맹비용이 기업영속성에 미치는 영향: 가맹만족과 경영성과의 순차 매개효과

  • Received : 2023.08.16
  • Accepted : 2023.09.19
  • Published : 2023.09.30
Download PDF
⟨ Previous Next ⟩

Abstract

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.

Keywords

References

  1. Anderson, J. C., & Narus, J. A. (1984). A model of the distributor's perspective of distributor-manufacturer working relationships. Journal of Marketing, 48(4), 62-74.
  2. Ahn, M. S., & Yoon, H. D. (2017). The effect of deciding factors of SMEs family business succession on corporate sustainability Management. Journal of the Korean Entrepreneurship Society. 12(2), 207-231.
  3. Bhattacherjee, A. (2001). Understanding information systems continuance: An expectation-confirmation model. MIS Qusrterly, 25(3), 351-370. https://doi.org/10.2307/3250921
  4. Birckley, J., & Dark, F. (1987). The choice of organization from: the case of franchising. Journal of Financial Economics, 18(2), 401-420.
  5. Bergen, M., & Dutta, S. & Walker, O. (1992). Agency relationships in marketing: a review of the implications and applications of agency and related theories. Journal of Marketing, 56(3), 1-24.
  6. Bolton, P., & Dewatripont, M. (2005). Contract theory. Cambridge, MA: MIT Press.
  7. Caves, R. (1976). Franchising: Firms, Markets, and intangible assets. Southern Economic Journal, 42(4), 572-586. https://doi.org/10.2307/1056250
  8. Choi, S. A., & Hwang, Y. Y. (2019). The effect of organizational brand internalization on the organizational brand permanence. Journal of the Korea Industrial Information Systems Research, 24(5), 77-93.
  9. Chung, T. S., & Kim, Y. T. (2014). Research on the Relationship among franchiser's support services, satisfaction, trust, multi-store operation, contract, recommendation. Journal of Korea Service Management Society, 15(3), 237-260.
  10. Dyllick, T., & Hockerts, K. (2002). Beyond the business case for responsibility: Toward the moral management of corporate sustainability. Business Strategy and the Environment, 11(2), 130-141.
  11. Frazier, G. L. (1983). On the measurement of interfirm power in channel of distribution. Journal of Marketing Research, 20(2), 158-166. https://doi.org/10.1177/002224378302000206
  12. Gaski, J. F. (1986). Interrelations among a channel entity's powersauces: Impact of the exercise of reward and coercion on expert, referent, and legitimate power sauces. Journal of Marketing Research, 23(1), 221-245.
  13. Han, S.-H., Bae, G. C., & Lee, J.-H. (2011). The effect of franchisor's pre-open support services on franchisee's relationship quality and performance in foodservice franchise system. Journal of Franchise Management (Korean Journal of Franchise Management), 2, 152-172.
  14. Huo, Y. H. (2012). Franchise system theory: Its evolution and application toward restaurant franchise. Korea Academic Society of Hotel Administration, 21(2), 165-187.
  15. Jensen, M., & Meckling, W. (1976). Theory of the firm: Managerial behavior, agency cost, and ownership structure. Journal of Financial Economics, 3, 305-360.
  16. Jin, M. G. (2018). Examination of the status of royalties in Korea's franchise industry and the effectiveness of the conversion of royalties. Franchising Journal, 4(1), 64-97.
  17. Jun, I. W., & Moon, S. U. (2011). The effect of franchisors' image, support activities, and ethics on franchisees' performance in Korea. Asia Pacific Journal of Small Business, 33(3), 73-89.
  18. Jo, D. S. (2007), Sustainable management. Seoul economic Management.
  19. Jung, Y. J. (2012). Theory of restaurant management. Seoul, Korea: Beaksan Publishing.
  20. Kang, B. S. (1997). Multivariate statistical analysis using matrix and SPSS/PC. Hakhyunsa.
  21. Kim, C. B. & Park, W. S. (2018). A study on the effect of food service franchise's support system on franchisee's trust, financial performance and intention of multi-store operation. Asia-pacific Journal of Business Venturing and Entrepreneurship, 13(5), 87-102.
  22. Kim, C. B. & Jo, K. R. (2020). The impact of operational and relationship characteristics on trust and commitment in the franchise systems. Korean Management Review, 32(5), 1265-1289.
  23. Kang, C. D. (2010). An empirical study on the recontract decision making factors of franchisee. Korea Research Academy of Distribution and Management Review, 13(5), 265-288.
  24. Kim, E. K. (2007). Influence of relational commitment of food service franchising on management performance, franchisee satisfactions and re-contract. Journal of Tourism Sciences, 3(1), 287-308.
  25. Kim, H. G. & Huh, G & Lee, M. H. (2009). A study on the effect of control and support by franchisor on management efficiency by franchisees. Journal of Hotel & Resort, 8(1), 75-89.
  26. Kim, M. J. & Oh, S. J. & No, W. H. (2015). The effects of franchisor's operation and supervising support on commitment, relationship satisfaction and cooperation. Journal of Distribution Research, 20(2), 115-137.
  27. Kim, J. H. (2007). The impact of support and dissensus on economic satisfaction, conflict, trust, and commitment in the franchise system. Journal of Channel and Retailing, 12(1), 55-69.
  28. Kim, S. S. & Lim, J. B. (2007). A study on franchise in restaurant business. Journal of Tourism Research, 21(4), 51-65.
  29. Kim, Y. S. & Wee, J. B. (2011). Comprehensive analysis of corporate social responsibility and financial performance. Korean Journal of Business Administration. 24(5), 2913-2950
  30. Lal, R. (1990). Improving channel coordination through franchising. Marketing Science, 9(4), 299-318. https://doi.org/10.1287/mksc.9.4.299
  31. Lee, E. Y. (2016). The effects of selection attributes on customer satisfaction, switching cost, and attractiveness of the alternative in small cafes. International Journal of Tourism and Hospitality Research, 30(7), 207-218. https://doi.org/10.21298/IJTHR.2016.07.30.7.207
  32. Lee, J. S. & Sung, D. K. & Gao, S. & Lee, J. Y. (2021). A study on the continuance intention of short clip application: Focusing on Chinese TikTok users. Journal of Digital Contents Society, 22(1), 125-135.
  33. Lee, J. H. & Lee, Y. K. & Han, G. C. (2010). The effect of franchisor's on-going support services on franchisee's relationship quality and business performance in the foodservice industry. Journal of Channel and Retailing, 15(3), 1-28.
  34. Lee, O. J. & Cho, S. H. & Jeon, K. C. (2013). Effect of franchisee training and support method on franchise business performance. Journal of Hotel & Resort, 12(3), 109-133.
  35. Lee, S. Y. & Cha, J. H. (2017). An empirical study on structuration and sustainability factors of social enterprises in Korea. Social Enterprise Studies, 10(1), 31-67.
  36. Lim, Y. K. & Kim, J. Y. (2018). Reflections on the reality of royalty imposition in the franchise industry. Journal of Franchising, 6, 39-51.
  37. Marrewijk, M. (2003). Concepts and definitions of CSR and corporate sustainability: Between agency and communion. Journal of Business Ethics, 44(2), 95-105. https://doi.org/10.1023/A:1023331212247
  38. Minkler, A. P. (1992). The new social contact. An inquiry into modern contractual relations. New Heaven CT: Yale University Press Publishing.
  39. Mohr, J. J. & Nevin, J. R. (1990). Communication strategies in marketing channels: A theoretical perspective. Journal of Marketing, 54(4), 36-51.
  40. O'neil, F. (1991). An operational procedure for prioritizing customer service elements. Journal Business Logistics, 12(2), 157-191.
  41. Park, J. H. (2009). Franchise management: A guide to connection theory and practice. Gyeonggi, Korea: Global Publishing.
  42. Park, S. I. (2009). Analysis of factors affecting the performance of Korean franchise business by stages. Asia-pacific Journal of Business Venturing and Enterpreneuship. 4(1), 89-111.
  43. Reed, A. S (2001). Extension in Oregon: Educational leadership for sustainability. Journal of Forestry, 99(3), 18-21.
  44. Przychodzen, J. & Przychodzen, W. (2013). Corporate sustainability and shareholder wealth, Journal of Environmental Planning and Management, 56(4), 474-493.
  45. Rubin, & Paul. (1978). The theory of the firm and the structure of franchise contracts. Journal of Law and Economics, 21(1), 223-233.
  46. Smith, M. F (1993). A descriptive study of franchisor-franchise working relationship: Implications small business management. Journal of Marketing Research , 17(2), 417-423.
  47. Wallace, A. D. (2005), Exploring the meanings of sustainability for community-based social entrepreneurs. Social Enterprise Journal, 1(1), 57-75. https://doi.org/10.1108/17508610580000708
  48. Williamson, O. E. (1985). Markets, Hierarchies, and the modem corporation. Journal of Economic Behavior & Organization, 17(19), 335-352.
  49. Won, S. H. (2011). Franchise management theory. Seoul, Korea: Chungram Publishing.
  50. Yang, J. A., Lee, S. Y. & Lee, D. H. (2012). Study on brand experience and personality effect on brand attitude and repurchase intention in food-franchised. The Korean Journal of Franchise Management, 3(1), 26-45.
  51. Yun,J. H., & Lee, J. H. (2005). The relationship between franchisor and franchisee's performance. Journal of Foodservice Management, 8(2), 211-228.
  52. Yu, W. J. (2001). An empirical study on the relationship between the extent of use of nonfinancial performance measurement and the financial performance under the environmental uncertainty. Review of Accounting and Policy Studies, 6(1), 111-139