• Knowledge Management Research
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• v.13 no.2
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• pp.53-72
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• 2012

Recently, an effective building and utilization of information system are essential in franchise firms as well as corporate management. Accordingly, this study is to examine the structural relationships among partnership quality of supplier, trust with a supplier and commitment, and franchise information system performance based on Henderson's(1990) information system partnership model and Lee and Kim's(1999) partnership model. For these purposes, the authors developed several hypotheses. The data were collected from 173 franchisors and analyzed with SPSS 18.0 and AMOS 18.0 The results are as following. First, sharing knowledge, interdependence, and mutual benefit influence supplier trust, but do not influence commitment. Second, supplier trust affect commitment and it prove that supplier trust is a full mediating role between partnership quality and commitment of franchise and information system supplier. Third, both supplier trust and commitment have a positive effect on performance of franchise information system. Therefore, it implies that supplier trust is significant factor in an performance of franchise information system. At the end of this paper, managerial and theoretical implications, limitations and future research directions were suggested.

• The Korean Journal of Franchise Management
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• v.9 no.1
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• pp.7-15
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• 2018

Purpose - The purpose of this study was to establish self sustainable win-win growth model for Korea franchise corporate sustainability and to suggest theoretical and practical implications for franchise management. Research design, data, and methodology - This study is based on literature review methodology. Result - The study suggested the ways of self sustainable win-win growth model for Korea franchise corporate sustainability. First, franchiors should strengthen requisite & specify in the contract, share information & strengthen transparency, and establish win-win management support system for control & autonomy balance. Second, franchises should develop CEO management competency & employee work competency, and establish recognition for Intellectual Property Rights Use. Third, franchisors and franchises should implement contract sincerely, strengthen Organizational Citizenship Behavior, and solve moral laxity. Forth, franchisors and franchises should establish trust and value with communication to make Creating Social Value. Fifth, franchisors and franchises should realize self sustainable social value for corporation and social community. To make this, franchsors and franchise should establish self sustainable win-win growth ecosystem with people, system, culture, innovation. Conclusions - First, Franchisors and franchises should distribute 'Self sustainable win-win growth 2025 for Korea franchise corporate sustainability' and 'Self sustainable win-win growth model for Korea franchise corporate sustainability'. Second, Franchisors and franchises should change their perspective about franchise industry. Third, Franchisors and franchises should develop various training and development plans for franchise industry. Fourth, Franchisors and franchises should establish franchise performance certificate system.

• The Korean Journal of Franchise Management
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• v.12 no.4
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• pp.1-11
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• 2021

Purpose: The franchise system started by Singer Sewing Machine in the US is acting as a national economic growth engine in terms of job creation and economic growth. In China, the franchise system was introduced in the mid-1980s. And since joining the WTO, it has grown by 5-6% every year. However, compared to the growth rate of franchises, studies on shared growth between the chain headquarters and franchisees were insufficient. Accordingly, recent studies related to shared growth between the chain headquarters and franchisees have been active in China. The purpose of this study is to examine the knowledge transfer system between the knowledge creation, knowledge sharing, and the use of knowledge by franchise chain headquarters in China. In addition, the relationship between franchise satisfaction and performance is identified. Research design, data, and methodology: The data were collected from franchise stores in Sichuan, China, and were conducted with the help of ○○ Incubation, a Sichuan Province-certified incubator. From November 2020 to January 2021, 350 copies of the questionnaire were distributed in China, and 264 copies were returned. Of these, 44 copies with insincere answers and response errors were excluded, and 222 copies were used for analysis. The data were analyzed with SPSS 22.0 and AMOS 22.0 statistical packages. Result: The results of this study are as follows. First, knowledge creation has been shown to have a statistically significant impact on knowledge sharing and knowledge utilization. In particular, the effectiveness of knowledge creation was higher in knowledge sharing than in knowledge utilization. And we can see that knowledge sharing also has a statistically significant e ffect on knowledge utilization. Second, knowledge sharing was not significant for transaction satisfaction and business performance, and knowledge utilization was significant for transaction satisfaction and business performance. These results can be said to mean less interdependence of the Chinese franchise system. Finally, transaction satisfaction was statistically significant to business performance. The purpose of this study was to examine the importance of knowledge management to secure long-term competitive advantage for Chinese franchises. This study shows that knowledge sharing is important for long-term franchise growth. And we can see that there is a lack of knowledge sharing methods in the case of franchises in China. I n addition, it was found that the growth of Chinese franchises requires systematization of communication, information sharing measures and timing, help from chain headquarters, and mutual responsibility awareness.

• Journal of Distribution Science
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• v.13 no.4
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• pp.65-76
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• 2015

Purpose - This article aims to present and test a model regarding franchisors' supporting activities that may positively influence franchisees' attitude toward the franchising headquarter and their own business performance. Moreover, the authors examine the moderating effect of competitive intensity between franchisee attitude and business performance. Most previous research focused on behavioral performance measurements such as satisfaction, trust, and commitment. There are few empirical studies that focus on financial performance data because it is difficult to determine a relational mechanism between behavioral and financial performance. Moreover, financial data is confidential and difficult to collect in many cases. However, this study measures financial performance (e.g., sales revenue per square meter) differently than most previous research, which is mostly focused on the behavioral performance measurements. Research design, data, and methodology - To test our hypotheses, we selected 137 franchisee managers who are running chains of one of the foremost bakery franchise brands in South Korea. This study carefully investigated the reliability, content validity, convergent validity, and discriminant validity of the proposed instrument by analyzing the data obtained from the samples. The data was analyzed using the AMOS structural equation modeling program. Results - The results indicated that: non-financial support activities (e.g., information exchange and communication) had a positive impact on the franchisee attitude toward the franchising headquarter. The franchisee attitude in turn had a positive effect on the headquarters' business performance. Furthermore, competitive intensity could enhance the relationship between franchisee attitude toward franchising headquarter and business performance in a local franchise market. However, financial support activities (e.g., rewards and promotional support) and training had no relationship with either franchisee attitude or business performance. Conclusions - This study provides some practical implications to franchisors in terms of franchise operation and store opening strategies. With respect to the franchise operation strategy, franchisors need to focus on non-financial rather than financial support. Most franchisees consider the necessity of financial support activities and not their sufficiency because these activities are specified in their franchise contract. In addition, it is important for franchisees to maintain a positive attitude for the franchise headquarters. The franchisees with a positive attitude for the franchisor can show a high degree of solidarity for various support activities, and it consequently determines franchisees' sales performance. In terms of franchise store opening strategy, this study suggests an additional criterion that can be considered in determining the location of direct and non-direct management stores (e.g., franchisees' stores). In this research, franchise stores located within high level of competitive intensity are shown to have a high relationship between franchisee attitudes of franchisor support activities and business performance compared to the franchisees located within low competitive intensity level. This result shows that opening non-direct franchise stores is more effective than direct stores in higher competitive market situations. Research contribution, implications, and further research directions are discussed at the end of the paper.

• The Korean Journal of Franchise Management
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• v.2 no.1
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• pp.152-172
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• 2011

This study aims to analyze the effect of franchisor's pre-open support services on franchisee's relationship quality and performance in foodservice franchise system. The analysis data was collected from 500 franchisees located in Seoul and Gyeonggi-do of Republic of Korea. The finding are as followings: firstly, the factors of information providing, market researching, interior and equipment supporting, education and training supporting, sale and promotion supporting, and legal supporting influence positively franchisee's satisfaction. Second, regarding relationship among relationship quality, satisfaction positively influences trust and commitment, and trust positively influence commitment. Third, relationship quality influences positively both financial and non-financial performance.

• 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 Global Scholars of Marketing Science
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• v.18 no.4
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• pp.61-118
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• 2008

The purpose of this research is to construct research framework for international franchising based on existing literature and to identify research components in the framework. Franchise can be defined as management styles that allow franchisee use various management assets of franchisor in order to make or sell product or service. It can be divided into product distribution franchise that is designed to sell products and business format franchise that is designed for running it as business whatever its form is. International franchising can be defined as a way of internationalization of franchisor to foreign country by providing its business format or package to franchisee of host country. International franchising is growing fast for last four decades but academic research on this is quite limited. Especially in Korea, research about international franchising is carried out on by case study format with single case or empirical study format with survey based on domestic franchise theory. Therefore, this paper tries to review existing literature on international franchising research, providing research framework, and then stimulating new research on this field. International franchising research components include motives and environmental factors for decision of expanding to international franchising, entrance modes and development plan for international franchising, contracts and management strategy of international franchising, and various performance measures from different perspectives. First, motives of international franchising are fee collection from franchisee. Also it provides easier way to expanding to foreign country. The other motives including increase total sales volume, occupying better strategic position, getting quality resources, and improving efficiency. Environmental factors that facilitating international franchising encompasses economic condition, trend, and legal or political factors in host and/or home countries. In addition, control power and risk management capability of franchisor plays critical role in successful franchising contract. Final decision to enter foreign country via franchising is determined by numerous factors like history, size, growth, competitiveness, management system, bonding capability, industry characteristics of franchisor. After deciding to enter into foreign country, franchisor needs to set entrance modes of international franchising. Within contractual mode, there are master franchising and area developing franchising, licensing, direct franchising, and joint venture. Theories about entrance mode selection contain concepts of efficiency, knowledge-based approach, competence-based approach, agent theory, and governance cost. The next step after entrance decision is operation strategy. Operation strategy starts with selecting a target city and a target country for franchising. In order to finding, screening targets, franchisor needs to collect information about candidates. Critical information includes brand patent, commercial laws, regulations, market conditions, country risk, and industry analysis. After selecting a target city in target country, franchisor needs to select franchisee, in other word, partner. The first important criteria for selecting partners are financial credibility and capability, possession of real estate. And cultural similarity and knowledge about franchisor and/or home country are also recognized as critical criteria. The most important element in operating strategy is legal document between franchisor and franchisee with home and host countries. Terms and conditions in legal documents give objective information about characteristics of franchising agreement for academic research. Legal documents have definitions of terminology, territory and exclusivity, agreement of term, initial fee, continuing fees, clearing currency, and rights about sub-franchising. Also, legal documents could have terms about softer elements like training program and operation manual. And harder elements like law competent court and terms of expiration. Next element in operating strategy is about product and service. Especially for business format franchising, product/service deliverable, benefit communicators, system identifiers (architectural features), and format facilitators are listed for product/service strategic elements. Another important decision on product/service is standardization vs. customization. The rationale behind standardization is cost reduction, efficiency, consistency, image congruence, brand awareness, and competitiveness on price. Also standardization enables large scale R&D and innovative change in management style. Another element in operating strategy is control management. The simple way to control franchise contract is relying on legal terms, contractual control system. There are other control systems, administrative control system and ethical control system. Contractual control system is a coercive source of power, but franchisor usually doesn't want to use legal power since it doesn't help to build up positive relationship. Instead, self-regulation is widely used. Administrative control system uses control mechanism from ordinary work relationship. Its main component is supporting activities to franchisee and communication method. For example, franchisor provides advertising, training, manual, and delivery, then franchisee follows franchisor's direction. Another component is building franchisor's brand power. The last research element is performance factor of international franchising. Performance elements can be divided into franchisor's performance and franchisee's performance. The conceptual performance measures of franchisor are simple but not easy to obtain objectively. They are profit, sale, cost, experience, and brand power. The performance measures of franchisee are mostly about benefits of host country. They contain small business development, promotion of employment, introduction of new business model, and level up technology status. There are indirect benefits, like increase of tax, refinement of corporate citizenship, regional economic clustering, and improvement of international balance. In addition to those, host country gets socio-cultural change other than economic effects. It includes demographic change, social trend, customer value change, social communication, and social globalization. Sometimes it is called as westernization or McDonaldization of society. In addition, the paper reviews on theories that have been frequently applied to international franchising research, such as agent theory, resource-based view, transaction cost theory, organizational learning theory, and international expansion theories. Resource based theory is used in strategic decision based on resources, like decision about entrance and cooperation depending on resources of franchisee and franchisor. Transaction cost theory can be applied in determination of mutual trust or satisfaction of franchising players. Agent theory tries to explain strategic decision for reducing problem caused by utilizing agent, for example research on control system in franchising agreements. Organizational Learning theory is relatively new in franchising research. It assumes organization tries to maximize performance and learning of organization. In addition, Internalization theory advocates strategic decision of direct investment for removing inefficiency of market transaction and is applied in research on terms of contract. And oligopolistic competition theory is used to explain various entry modes for international expansion. Competency theory support strategic decision of utilizing key competitive advantage. Furthermore, research methodologies including qualitative and quantitative methodologies are suggested for more rigorous international franchising research. Quantitative research needs more real data other than survey data which is usually respondent's judgment. In order to verify theory more rigorously, research based on real data is essential. However, real quantitative data is quite hard to get. The qualitative research other than single case study is also highly recommended. Since international franchising has limited number of applications, scientific research based on grounded theory and ethnography study can be used. Scientific case study is differentiated with single case study on its data collection method and analysis method. The key concept is triangulation in measurement, logical coding and comparison. Finally, it provides overall research direction for international franchising after summarizing research trend in Korea. International franchising research in Korea has two different types, one is for studying Korean franchisor going overseas and the other is for Korean franchisee of foreign franchisor. Among research on Korean franchisor, two common patterns are observed. First of all, they usually deal with success story of one franchisor. The other common pattern is that they focus on same industry and country. Therefore, international franchise research needs to extend their focus to broader subjects with scientific research methodology as well as development of new theory.

• Journal of Information Technology Applications and Management
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• v.24 no.1
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• pp.111-128
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• 2017

Existing studies for recommender have focused on recommending an appropriate item based on the customer preference. However, it has not yet been studied actively to recommend purchase timing for the repurchase product despite of its importance. This study aims to propose MLP and RNN models based on the only simple purchase history data to predict the timing of customer repurchase and compare performances in the perspective of prediction accuracy and quality. As an experiment result, RNN model showed outstanding performance compared to MLP model. The proposed model can be used to develop CRM system which can offer SMS or app based promotion to the customer at the right time. This model also can be used to increase sales for repurchase product business by balancing the level of order as well as inducing repurchase of customer.

• 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 Distribution Science
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• v.10 no.6
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• pp.39-53
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• 2012

It is widely known that knowledge management plays a facilitating role that contributes to upgrading organizational performance. Knowledge management systems (KMS), especially, support the knowledge management process including the sharing, creating, and using of knowledge within a company, and maximize the value of knowledge resources within an organization. Despite this widely held belief, there are few studies that describe how companies actually develop, share, and practice their knowledge. Companies in the domestic small franchise sector, which are in the early stages in terms of knowledge management, need to improve their KMS to manage their franchisees effectively. From this perspective, this study uses a qualitative approach to explore the actual process of knowledge management implementation. This article presents a case study of PB (Paris Baguette) company, which is the first to build a KMS in the franchise industry. The study was able to confirm the following facts through the analysis of target companies. First, the chief executive's support is a critical success factor and this support can increase the participation of organization members. Second, it is important to build a process and culture that actively creates and leverages information in knowledge management activities. The organizational learning culture should be one where the creation, learning, and sharing of new knowledge is developed continuously. Third, a horizontal network organization is needed in order to make relationships within the organization more close-knit. Fourth, in order to connect the diverse processes such as knowledge acquisition, storage, and utilization of knowledge management activities, information technology (IT) capabilities are essential. Indeed, IT can be a powerful tool for improving the quality of work and maximizing the spread and use of knowledge. However, during the construction of an intranet based KMS, research is required to ensure that the most efficient system is implemented. Finally, proper evaluation and compensation are important success factors. In order to develop knowledge workers, an appropriate program of promotion and compensation should be established. Also, building members' confidence in the benefits of knowledge management should be an ongoing activity. The company developed its original KMS to achieve a flexible and proactive organization, and a new KMS to improve organizational and personal capabilities. The PB case shows that there are differences between participants perceptions and actual performance in managing knowledge; that knowledge management is not a matter of formality but a paradigm that assures the sharing of knowledge; and that IT boosts communication skills, thus creating a mutual relationship to enhance the flow of knowledge and information between people. Knowledge management for building organizational capabilities can be successful when considering its focus and ways to increase its acceptance. This study suggests guidelines for major factors that corporate executives of domestic franchises should consider to improve knowledge management and the higher operating activities that can be used.