• Journal of Distribution Research
• /
• v.15 no.3
• /
• pp.1-34
• /
• 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
• /
• v.19 no.1
• /
• pp.17-26
• /
• 2021

Purpose: This research is to investigate the effect of the franchisee's basic psychological needs satisfaction on its business performance. Moreover, within the relationship between the franchisee's basic psychological needs satisfaction and its performance, the current study examined the mediating effect of work engagement and the moderating effect of the franchisor's support. Research design, data and methodology: 367 survey data were collected and analyzed using SPSS 22 and AMOS 22. For the assessment of goodness of fit of the models, fit indexes such as TLI, CFI, RMSEA were employed. Results: The results of the study are as follows: first, the franchisee's basic psychological needs satisfaction is positively related to performance; second, the franchisee's basic psychological needs satisfaction is positively related to work engagement; third, the franchisee's work engagement is positively related to performance; fourth, it is uncovered that the franchisee's work engagement mediates the relationship between basic psychological needs satisfaction and business performance; fifth, the moderating effect of the franchisor's support was insignificant. Conclusion: This study would like to contribute to the field of franchise performance, by re-assessing the significance of the individual's characteristics (of the franchisee) which has been ignored thus far. Furthermore, the limitations of the study and future research directions were discussed.

• Journal of the Korea Society of Computer and Information
• /
• v.23 no.10
• /
• pp.189-201
• /
• 2018

This study analyzed the effect of core competence of supervisor on the satisfaction, loyalty, business performance of franchisees and business performance of franchisor. And the purpose of this study is to solve the most problematic issues in franchise business such as poor sales of franchisee, inadequate measures for activating sluggish stores, closing rate increase of franchisee, dispute between a franchisee and franchisor. The results of this study will be used as data for the success of Franchisor's business operation and for the change and development of the franchise industry. In this study, 168 CEOs and employees in the franchise industry were surveyed. Through previous research and expert interviews, we designed the core competency factors of franchise supervisors into seven areas: check, consulting, coordination, promotion, counseling, communication, and control. In order to verify the hypothesis of the research, the relationship between variables was verified by simple regression analysis and multiple regression analysis. Key result of the study are as follows. First, the core competency of the supervisor has a positive relationship with the franchisee's satisfaction. Second, the core competence of the supervisor has a positive relationship with the franchisee's loyalty. Third, franchisee's satisfaction has a positive effect on loyalty. Fourth, franchisee's satisfaction positively affects the business performance of franchisee and franchisor. Fifth, franchisee's loyalty positively affects the business performance of franchisee and franchisor.

• Journal of Distribution Science
• /
• v.21 no.4
• /
• pp.81-89
• /
• 2023

Purpose: This study aims to analyze the effects of job satisfaction regarding the franchisee's continuous operation intention. In addition, it intends to investigate the mediating effect of work engagement in the relationship between job satisfaction and sustainable performance of the franchisee. Research design, data and methodology: 361 survey data were collected and analyzed using SPSS 24 and AMOS 24. To assess the model for goodness of fit, indexes such as TLI, CFI, RMSEA were used. Moreover, SEM method and bootstrapping were used for hypotheses testing. Results: The results of this study are as follows. First, the relationship between job satisfaction and the employee's continuous operation intention was significant. Second, it confirms that indeed job satisfaction positively affects work engagement. Third, it was found that work engagement had positive (+) effects on the franchisees' financial performance along with its continuous operation intention. Fourth, work engagement was found to mediate the relationship between job satisfaction and continuous operation intention of the franchisee. Conclusion: We found that job satisfaction of the franchisee is related with continuous operation intention through work engagement and financial performance. Hence, by demonstrating the empirical evidence which has been insufficient so far, this study contributes to the theory accumulation regarding the franchisee's continuous operation intention.

• The Korean Journal of Franchise Management
• /
• v.10 no.3
• /
• pp.25-35
• /
• 2019

Purpose - The major objective of this study was to investigate the effect of franchisor's (economic and philanthropic) CSR in inspiring franchisee's loyalty for the franchisor. Another aim of this investigation also was to clarify the mediating role of economic and social satisfaction in the relationship between franchisor's CSR and franchisee's loyalty. Research design, data, and methodology - This study explores the structural relationship between franchisor's CSR and franchisee's loyalty and in these relationships, the mediating role of relationship satisfaction. Data were gathered from employees(above manager) in food-service franchisee companies in Seoul, Korea. The questionnaires were distributed to managers of the franchise stores. A total of 251 questionnaires were collected. Data management and analysis were performed using SPSS 21.O and SmartPLS 3.0. Evaluation of measurement model and structural model was carried out using confirmatory factor analysis and correlation analysis. Result - The results of this study show as follows. First, economic CSR had positive effects on economic satisfaction and social satisfaction. Second, philanthropic CSR had positive effects on social satisfaction. Third, economic satisfaction and social satisfaction had positive effects on franchisee's loyalty to the franchisor. Conclusions - The important implications of this study have as follows. First, this study has found that economic CSR can create a high economic satisfaction and social satisfaction of franchisee. Second, this findings suggest that the philanthropic CSR can improve the social satisfaction of franchisee. Third, this results demonstrate, for the first time, that the economic satisfaction and social satisfaction of franchisees can play a crucial role to improve their loyalty for the franchisor and pursue mutual development by maintaining the stable business relationship with a franchisor. In this investigation there are at least three limitations. First, Because the research sample is limited to the foodservice franchisee in Seoul, it is not possible to be representativeness of the national franchisee. Second, CSR activities are mostly focused on large franchise companies. Therefore, there is a limit to the research approach. Finally, this study examined the effect of economic CSR and philanthropic CSR on the loyalty of franchisors, but in the future study, it is necessary to analyze the relationship between CSR and loyalty of franchise companies by collecting specific quantitative data such as re-contract rate and management performance of franchisees.

• Journal of Distribution Science
• /
• v.11 no.1
• /
• pp.25-34
• /
• 2013

Purpose - This study examines the adverse press coverage that has increased in proportion to the remarkable growth of various kinds of franchise businesses in the food service industry. Today, the trust of franchisees in relation to their franchisor, and the maintenance of good relations between the two, has become a significant social issue. This study investigates relationship satisfaction and the long-term commitment between the franchisor and franchisee. Research design, data, methodology - We used a path analysis to investigate the relationship between justice and trust, trust and relationship satisfaction, justice and relationship satisfaction, trust and long-term commitment, and relationship satisfaction and long-term commitment. Structural Equation Modeling and a Sobel test were used to investigate the mediating effects of trust and relationship satisfaction. Data were collected from 237 Food Franchisees in Seoul and Gyeonggi Province in order to test the theoretical model and its hypotheses. Two research methodologies are generally used in the distribution management field. For this study, an empirical method was used. Results - A causal analysis was carried out to test if the research model has a sufficient fit index (for instance, χ² = 46.694, df = 10, p = .000, GFI = 0.946, AGFI = 0.850, RMR = 0.034, NFI = 0.966, CFI = 0.973), and the results showed that the model was sufficient, thus demonstrating the suitability of the research model. Each hypothesis had a positive influence, both on long-term commitment and relationship satisfaction. Justice with the franchisor had a positive influence on trust. Relation satisfaction cognized by franchisees was found to positively influence long-term commitment. The franchisee perception of justice in relation to the franchisor had no significant influence on long-term commitment. The study investigated the hypothesis that trust could mediate justice and long-term commitment, and that relationship satisfaction could also mediate long-term commitment Both trust and relationship satisfaction were found to be important for long-term commitment. Specifically, trust sub-factors and justice sub-factors influenced long-term commitment. Identification-based and knowledge-based trust were more important than calculus-based trust. Distributive justice was deemed more important than procedural justice; distributive justice should thus be strengthened. Conclusions - Both franchisor and franchisee were independent businesses. Evidently however, the franchisor could not ensure profit without long-term commitment from the franchisee. As for the success of the franchise business, the franchisor should carry out appropriate strategies leading to a satisfactory relationship. For example, transparency makes it possible to maintain and enhance trust and to improve relationship satisfaction. Just relations between franchisor and franchisee should make it possible to maintain and enhance the franchisee's trust. The franchisor should provide a variety of information with respect to the franchisee's business success. Finally, in order to improve the franchisee's long-term commitment, the franchisor should ensure a just approach with trust and relationship satisfaction among their strategies.

• Journal of Distribution Research
• /
• v.16 no.1
• /
• pp.1-27
• /
• 2011

I. Introduction: This study is to examine the structural relationships among exogenous variable (preliminary and post-support, franchisee's perceived business possibility, communication, moral hazard), the mediated variables(satisfaction, perceived risk, trust) and dependent variable(recontracting intention) in the food service franchise industry context. More specifically, this study has considered some realistic characteristics factors influencing satisfaction, perceived risk and trust between franchisors and franchisees and their further recontracting intention from the perspective of a practical approach. In this study, 437 data has been collected and used for the SPSS and AMOS analysis. The data were analyzed with structural equation modeling. Since the result of the overall model analysis demonstrated a good fit, we could further analyze our data. II. Research Model: This study is to examine the structural relationships among preliminary and post-support by franchisor, franchisee's perceived business possibility, and communication, moral hazard, has on effect on franchisee's satisfaction, perceived risk, trust and recontracting intention in the food service franchise industry context. Hypotheses are as following (Stern & EL-Ansary 1988; Oliver, 1997;Kee & Knox, 1970; Moorman, Deshpande & Zaltman, 1993; Perron, 1998; Zaheer, McEvily, Perrone, 1998). III. Result and Implication: We examined franchisee who have food service stores for samples of this study. The data were analyzed with structural equation modeling using path analysis. The result of the overall model analysis appeared as following: ${\chi}^2$ = 61.578 (d.f.=9, p<0.01), CFI =.990, GFI =.973, AGFI =.863, RMR =.019, RMSEA= .116, NFI = .988, TLI = .959. The findings can be summarized as follows: First, preliminary and post support of franchisor, perceived business possibility and communication positively influence to franchisee's satisfaction. Second, moral hazard of franchisor has negatively influence to franchisee's satisfaction and positively influence to perceived risk. Third, franchisee's satisfaction and trust has positively influence to recontracting intention. Fourth, franchisee's perceived risk has negatively influence to trust and recontracting intention. We can concluded that franchisor's preliminary and post support of franchisor, perceived business possibility and communication may be considered as the important factors influence to franchisee's satisfaction. Moral hazard has become a focused issue in franchise industry. Finally, the managerial implication has been stated as followings: First, in the process of building a systematic industry support franchise system and developing a creative business model, franchisee's stable profitability should be considered as the first important factor. The franchisee's trust to franchise may become a dominant factor that influence the business expansion of franchisor. Second, franchisor should communication with their franchisees and deal with the realistic difficulties faced by them with an effort. Third, the franchisor should achieve a synergy effect by utilizing the win-win strategy. The moral hazard strategy that achieving the profit through franchisee's damage will not be inadvisable to franchisor. Then the long-term oriented development and profitability can be maintained. To do so, the franchise industry may break away from the traditional business structure to improve management transparency and competitiveness on investment and organizational changing management. The conflict between franchisor and franchisee also can be reduced and big success can be achieved in the franchise industry.

• Journal of the East Asian Society of Dietary Life
• /
• v.21 no.2
• /
• pp.284-297
• /
• 2011

The purpose of this study was to investigate whether a franchisor's influence strategies could affect a franchisee's relationship satisfaction, which in turn could affect their boundary spanning behaviors. The constructs of influence strategies included promise, recommendation, information exchange, request, threat, and legalistic plea. The boundary spanning behaviors were external representation, internal influence, and service delivery. The sample used for this research consisted of store owners or managers of franchisee restaurants in Korea. A total of 605 questionnaires were analyzed using SPSS/$PC^+$ and LISREL. Empirical research findings were that (1) promise, recommendation, and legalistic plea affected relationship satisfaction, and (2) relationship satisfaction influenced external representation, internal influence and service delivery. However, information exchange, request, and threat did not affect relationship satisfaction. Based on these findings, franchisors were recommended to provide motivations to franchisees if the former wants to receive help from the latter.

• The Korean Journal of Franchise Management
• /
• v.9 no.3
• /
• pp.31-43
• /
• 2018

Purpose - This study examines the role of foodservice franchisee's perceived justice(distributive, procedural, and interactional) in developing long-term orientation to franchisor and investigate the mediating role of cohesiveness and relationship satisfaction in the relationship between franchisee's perceived justice and long-term orientation to franchisor. Research design, data, and methodology - We collected data from managers and owners in foodservice franchisees located in Seoul, Korea. Among a total of 500 questionnaires, 500 questionnaires were returned. After excluding 36 invalid respondent questionnaires, 496 valid questionnaires(response rate of 99.2%) were analyzed using frequency, confirmatory factor analysis, correlations analysis, and structural equation modeling with SPSS 21 and SmartPLS 3.0. Result - The findings of this study are as follows: First, distributive justice and interactional justice had positive effects on cohesiveness, but procedural justice did not. Second, distributive justice and interactional justice had positive effects on relationship satisfaction, but procedural justice did not. Third, cohesiveness and relationship satisfaction had positive effects on franchisee's long-term orientation to franchisor. Conclusions - The implications of this study are as follows. First, this study found that procedural justice can create a high cohesiveness and identification of franchisee and also maintain a cooperative relationship with the franchisor. Second, this findings suggest that the perceived distributional and interactional justice can improve the satisfaction with the franchisor and thus positively influence the intention to maintain the relationship and the intention to recontract. Third, the results of this study indicate that the cohesiveness of franchisees can play a pivotal role to improve their satisfaction with the franchisor and pursue mutual development by continuously maintaining stable business relationship with franchisor. The findings of this study are subject to at least three limitations. First, the research subject is limited to the food service franchise shops in Seoul area, so the sample was not nationally representative of the franchise stores. Second, the perceived fairness is measured only from the point of view of the franchisee, and this study has a limitation to examine the difference between the perceived franchisee's and franchisor's justice. Third, Future research needs to identify more closely the relationships between perceived fairness and long-term orientation by gathering specific quantitative data such as the renewal rate and the business performance.

• Journal of Distribution Research
• /
• v.8 no.1
• /
• pp.47-67
• /
• 2003

The purpose of this study is to investigate three issues. First, we investigated four control mechanisms that might increase the franchisee's perception of franchiser commitment: a franchiser's TSIs, relational norms, monitoring, and qualification programs. Second, we proposed that appropriateness and efficacy of these control mechanisms in fostering franchiser commitment might be changed over the relationship life cycle. Third, we examined how bureaucracy and levels of franchiser's commitment related to relationship satisfaction. Through empirical analysis, research results indicate that a franchiser's TSIs and relational norms are positively associated with the franchisee's perception of franchiser commitment. In detail, what increase franchisee's perception of franchiser commitment in short-term relationship are franchiser's TSIs but relational norms are more important in the long-term relationship. In addition, the results show that franchisee's perception of franchiser commitment, participation and formalization are positively related to relationship satisfaction.