• 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.17 no.1
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• pp.37-63
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• 2012

In franchise business, exclusive sales territory (sometimes EST in table) protection is a very important issue from an economic, social and political point of view. It affects the growth and survival of both franchisor and franchisee and often raises issues of social and political conflicts. When franchisee is not familiar with related laws and regulations, franchisor has high chance to utilize it. Exclusive sales territory protection by the manufacturer and distributors (wholesalers or retailers) means sales area restriction by which only certain distributors have right to sell products or services. The distributor, who has been granted exclusive sales territories, can protect its own territory, whereas he may be prohibited from entering in other regions. Even though exclusive sales territory is a quite critical problem in franchise business, there is not much rigorous research about the reason, results, evaluation, and future direction based on empirical data. This paper tries to address this problem not only from logical and nomological validity, but from empirical validation. While we purse an empirical analysis, we take into account the difficulties of real data collection and statistical analysis techniques. We use a set of disclosure document data collected by Korea Fair Trade Commission, instead of conventional survey method which is usually criticized for its measurement error. Existing theories about exclusive sales territory can be summarized into two groups as shown in the table below. The first one is about the effectiveness of exclusive sales territory from both franchisor and franchisee point of view. In fact, output of exclusive sales territory can be positive for franchisors but negative for franchisees. Also, it can be positive in terms of sales but negative in terms of profit. Therefore, variables and viewpoints should be set properly. The other one is about the motive or reason why exclusive sales territory is protected. The reasons can be classified into four groups - industry characteristics, franchise systems characteristics, capability to maintain exclusive sales territory, and strategic decision. Within four groups of reasons, there are more specific variables and theories as below. Based on these theories, we develop nine hypotheses which are briefly shown in the last table below with the results. In order to validate the hypothesis, data is collected from government (FTC) homepage which is open source. The sample consists of 1,896 franchisors and it contains about three year operation data, from 2006 to 2008. Within the samples, 627 have exclusive sales territory protection policy and the one with exclusive sales territory policy is not evenly distributed over 19 representative industries. Additional data are also collected from another government agency homepage, like Statistics Korea. Also, we combine data from various secondary sources to create meaningful variables as shown in the table below. All variables are dichotomized by mean or median split if they are not inherently dichotomized by its definition, since each hypothesis is composed by multiple variables and there is no solid statistical technique to incorporate all these conditions to test the hypotheses. This paper uses a simple chi-square test because hypotheses and theories are built upon quite specific conditions such as industry type, economic condition, company history and various strategic purposes. It is almost impossible to find all those samples to satisfy them and it can't be manipulated in experimental settings. However, more advanced statistical techniques are very good on clean data without exogenous variables, but not good with real complex data. The chi-square test is applied in a way that samples are grouped into four with two criteria, whether they use exclusive sales territory protection or not, and whether they satisfy conditions of each hypothesis. So the proportion of sample franchisors which satisfy conditions and protect exclusive sales territory, does significantly exceed the proportion of samples that satisfy condition and do not protect. In fact, chi-square test is equivalent with the Poisson regression which allows more flexible application. As results, only three hypotheses are accepted. When attitude toward the risk is high so loyalty fee is determined according to sales performance, EST protection makes poor results as expected. And when franchisor protects EST in order to recruit franchisee easily, EST protection makes better results. Also, when EST protection is to improve the efficiency of franchise system as a whole, it shows better performances. High efficiency is achieved as EST prohibits the free riding of franchisee who exploits other's marketing efforts, and it encourages proper investments and distributes franchisee into multiple regions evenly. Other hypotheses are not supported in the results of significance testing. Exclusive sales territory should be protected from proper motives and administered for mutual benefits. Legal restrictions driven by the government agency like FTC could be misused and cause mis-understandings. So there need more careful monitoring on real practices and more rigorous studies by both academicians and practitioners.

• Journal of Arbitration Studies
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• v.27 no.1
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• pp.161-182
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• 2017

The purpose of this study is to investigate the factors of conflict formation, conflict resolution type, and relationship performance between convenience store franchise headquarters and franchise stores operated by the franchise system located in the metropolitan area. The conclusion could be summarized as follows. First, according to factor analysis based on the previous research, the factor of conflict between convenience store headquarters and franchisee was tied to three factors such as goal disagreement, doctrinal discrepancy, and interdependence, whereas conflict resolution type was linked to three factors such as cooperation type, attack type, and avoidance type. Finally, the relationship performance is tied to three factors: financial performance, long-term cooperation, and non-financial performance. Second, as a result of Hypothesis 1, the interdependence was positively correlated when the cooperative type was the dependent variable. The target discrepancy was significantly positive(+) when the aggressive type was the dependent variable. The interdependence was significantly negative(-) when the avoidance type was the dependent variable. There also was a significantly positive(+) relationship in the target disagreement. Third, for Hypothesis 2, it is shown that target inconsistency is negative(-) for all cases where financial performance, long-term cooperation, and non-financial performance are dependent variables. Fourth, for Hypothesis 3, when the financial performance is the dependent variable, only the cooperative type shows a positive(+) relationship. On the other hand, when the long-term cooperation and the non-financial aptitude are the dependent variables, the cooperative type has a significant positive(+) relationship.

• The Korean Journal of Franchise Management
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• v.6 no.2
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• pp.31-49
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• 2015

The purpose of this study was to propose a policy development plan for win-win growth between franchisor and franchisee by investigating success factors of win-win growth on the basis of the problems between franchisor and franchisee. There are many small scale franchise businesses in Korea that have not achieved an economy of scale compared to the developed countries. The conflicts between franchisor and franchisee have continued due to a lack of social trust which comes from an excessively high ratio of business failure and big firms' expansion into franchise business, then again, the perception of relations between the topdog and the underdog causes many problems. As franchise is the industry based on common people that helps service industry advance and competitiveness of the self-employed improve, it needs to be activated as the higher value-added business by promoting establishment of business and strengthening foundation of related industry. A matter of mutual cooperation and win-win growth between franchisor and franchisee is important not only for the sound development of franchise industry but also for the stable growth of nation's economy. Thus, this study suggested a policy development plan for win-win growth between franchisor and franchisee by analyzing success factor of win-win growth based on the problems between franchisor and franchisee. The results of the study provide the important strategic way towards mutual growth and maintaining cooperative relationship between franchisor and franchisee in Korean franchise industry.

• Proceedings of the Korea Contents Association Conference
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• 2008.05a
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• pp.339-342
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• 2008

Franchisors court additional franchisees as marketing partners for continued growth in sales revenue. Competitive climate, potential franchisees have their choice of suitors and are likely to scrutinize them carefully. As this research makes, franchisors affiliated with chains that forge strong partnerships are to achieve superior performance. The chain that promises a strong partnership is more have its choice of prospective franchise partners. Developing strong partnerships can use to recruit high quality franchisees. If franchisors with to experience the benefits of a strong franchise partnership, they must be willing to work on behalf of the partnership, perform roles that may extend beyond their traditional boundaries, and resolve their disagreement to the benefit of the partnership rather than to their own benefit. Strong partnerships require sacrifices on the part of both the franchisees and franchisors. However, These sacrifices have substantial payoffs in terms of franchisor performance as well as the performance of the relationship as a whole.

• Journal of Distribution Science
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• v.2 no.1
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• pp.143-170
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• 2004

• Proceedings of the Korea Information Processing Society Conference
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• 2005.05a
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• pp.499-502
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• 2005

산업구조의 세분화 및 고객 요구사항의 다양화로 인해 국내 뿐만아니라 해외의 대고객 사업의 구조가 점점 프랜차이즈화 되고 있다. 그러나 프랜차이즈 업무가 표준화 및 전산화 되어있지 않아 실패하는 경우가 많다. 따라서 가맹점을 효율적으로 관리할 수 있는 표준적인 경영 관리 시스템의 필요성이 절실히 요구되는 실정이다. 본 논문은, 프랜차이즈 본부가 가맹점을 모집하고, 가맹점주의 창업업무를 도와주며, 교육 및 A/S등, 가맹점에 대한 지속적인 지원을 효율적으로 할 수 있게 함은 물론, 로얄티등 각종 수금업무를 효과적으로 수행할 수 있는 프랜차이즈 경영 관리 시스템을 구현하였다.

• Journal of Distribution Research
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• v.13 no.2
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• pp.1-27
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• 2008

In a power-asymmetry relationship like franchise system, a high dependent franchisee must often rely on its powerful partner. Therefore, in order to build up 'win-win' systems, therefore channel members should increase trust and commitment each other to enhance the relationship quality to sustain long-term cooperative relationships. First of all, to increase the relationship quality in franchise system, franchisor should increase franchisee's perception of the powerful franchisor's justice. The point of this research, I established basic hypotheses and comparative hypotheses to examine franchisor's behavior what franchisee expected which influences on franchisee's attitude and behavior in power - asymmetry relationship in franchise system. For the purpose of the empirical testing, managers of franchisee in the food service industry of Korea had been selected and analyzed, and major findings in this study as follow: First, the relational norm between franchisor and franchisee increased both distributive justice and procedural justice, especially relational norm had more effect on procedural justice than distributive justice. Second, distributive justice increased both economic commitment and social commitment while procedural justice just increased social commitment only but economic commitment. So, on the relational commitment, distributive justice was more important element than procedural justice. On the other hand, procedural justice had indirect effect on economic commitment through distributive and social commitment.

• The Korean Journal of Franchise Management
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• v.3 no.2
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• pp.1-19
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• 2012

This study intends to suggest the cooperative, win-win collaboration, as methods for settling disputes with the existing self-employed people over back-street business areas and disputes and conflicts between a franchiser and franchisees. In addition, it intends to analyze the Dunkin' Donuts purchasing cooperative in the US, where the franchising industry has been well developed; and to find the implications of cooperation strategies between Dunkin' Donuts and its franchisees that may be helpful for the South Korea's franchising industry. This study tries to discover a new model of the Korean-style franchise cooperative out of the basic principles and practice guidelines of cooperatives ranging from an early American franchise cooperative in 1955 to ARCOP, KFC, and Dunkin' Doughnuts in the late 1970s. Further, it looks into successful programs of a purchasing cooperative at Dunkin' Donuts such as TDP (Total Distribution Program), SFP (Shortening Futures Program) and DCP (Distribution Commitment Program). The case of the US Dunkin' Donuts, which operates the purchasing cooperative, suggests the following for the improvement of franchisees' profitability. First, relations of cooperation rather than of power are necessary between a franchiser and franchisees. Second, mutual solidarity of franchisees is necessary. Third, problems proper to the Korean franchise system should be improved. Fourth, an entrepreneurial spirit of going together rather than going fast is required. Fifth, complete satisfaction management is required. Considering different system environments between the two countries such as quantitative expansion within a short franchising history of 30 years or so and franchise profit models, there is a limit to generalizing down to a successful model of the win-win partnership cooperative. It is hoped that the sustainable management of the domestic franchising industry will be promoted in the future through the in-depth analysis of successful cooperatives.

• Journal of the Korea Society of Computer and Information
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• v.10 no.6 s.38
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• pp.299-308
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• 2005

Recently, the standardization and computerization of franchise management have been necessitated from the specialization of industrial areas and the diversification of customer requirements. The existing ERP(Enterprise Resource Planning) systems are commercially used, but usually are restrictive solutions about manufactured goods and inventory management. etc. In this Paper, we propose an effective franchise management system Franchiser X1(FX1), which is a total component-based franchise management system for effectively supporting franchise management works, including the recruit of franchisees, the management of franchisees, consulting, education and A/S, bill collecting, and so on.