• The Korean Journal of Franchise Management
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• v.5 no.1
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• pp.109-141
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• 2014

Recently, the interests of consumers in firms that implement the social commitment activities have been consistently growing. Consumers' evaluation about the level of corporate social responsibility(CSR) can affect the overall image for product or service of corporation. This recent changes make a marketer to have to consider direct and indirect effects of CSR efforts on the market performance. This phenomena is also found in the franchise industry. The importance of CSR is more critical rather than other industries since each franchisor should care franchisees as well as end users. Franchisors' execution of CSR could increase satisfaction of end user through consonance of activities provided by franchisees. However most franchisor stay in focusing on the traditional CSR activities. Therefore, this study aims to enhance the understanding the CSR in franchise and provide the phase model of CSR development for general firms including franchise. After diagnosis the firms with the proposed model, the study found many franchisors have huge gap between current CSR activities and higher level of CSR policies that franchisor have to make facing. This study call franchisors to reduce this gap by implementing new CSR efforts. If they answer for this calling, franchise industry could leap for making the best practice of creating shared value with other stakeholders.

• THE INTERNATIONAL COMMERCE & LAW REVIEW
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• v.51
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• pp.465-495
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• 2011

Domestic franchised businesses have been showing relatively fast growth, but the growth is expected to slow down as in those developed countries. In face of this changing market environment, domestic franchisers will have to turn their eyes abroad to achieve sustainable growth. On the other hand, more international franchisors could pursue expanding into the Korean market due to economic or strategic reasons in their home countries. In general, enterprises are faced with several barriers when entering foreign markets by franchising their operation. Issues relating to such entry barriers can be broadly classified into legal and managerial. To begin, international franchising necessitates enterprises to handle various aspects of legal issues. There are no internationally unified rules for franchise agreements as in international goods purchase contracts. This forces franchisors to have deep knowledge of concerned regulations and practices of each of the individual target countries, in particular franchising practices which differ from those of their own countries in terms of rights and obligations of the involved parties. Having regard to this situation, this study reviewed the EU's PEL CAFDC and other domestic and overseas regulations governing franchising. From the results, several contractual obligations were derived that need to be taken into account when handling the issues around the international franchise agreement. In closing this paper mainly having in mind enterprises in various business lines seeking to expand into international franchising, some unmet needs are worth commenting. First, there is an urgent need to establish practical guidelines along with the model agreement addressing the issues of international franchising in the absence of any unified international rules. Second, to meet the first need above, it is needed that the relevant authorities conduct a comprehensive review of the existing franchising regulations available across overseas countries and, based on the results, embark on gathering good common elements in the existing franchising regulations in individual countries, ultimately developing the best possible guidelines and examples.

• Journal of Distribution Research
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• v.10 no.2
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• pp.27-47
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• 2005

This study is basically focused on the relationship between the franchisors and franchisees. The goal of this study is mainly to inquire the variables of relationship characteristics affecting the commitment which lies in internal polity, and secondly to comprehensively analyze the performance resulting from commitment and examine the efficient alternatives onto relationship management. The practical methodology using in this study has been done in a national representing food franchise system. This study has been resulted in following: First, the variables that show significantly to the commitment are noncoercive influential strategy, dependence, cooperation, and goal divergence. In the contrast the coercive influential strategy hasn't showed significantly; Second, the result has showed that the commitment when it would be related with performance furthered the financial performance and role performance; and. therefore, we finally conclude that it would be more important to make lots of efforts of establishing the win-win relationship through the long-term commitment between the franchisor and franchisee in order to develop the more effective relationship of the franchise system.

• Journal of Arbitration Studies
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• v.29 no.1
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• pp.3-29
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• 2019

A franchise business is a business in which the owners, or "franchisors," sell the rights to their business logo, name, and model to third party retail outlets, owned by independent, third party operators, called "franchisees." There are a number of features in franchising or terms in franchise agreements that may lead to disputes between franchisors and franchisees. These disputes may arise because of underlying risks in the franchise relationship, franchise agreement, or conduct of the parties. In this case, ADR is an effective way to resolve disputes in a quicker and often less costly way than having to go to court. If an agreement cannot be reached through mediation, then arbitration becomes the next step to resolving the differences. Whereas mediation is non-binding and focused on facilitating the parties to find a resolution that is acceptable to both, arbitration is binding and may result in a decision that is not acceptable to one of the parties. These situations can be resolved through experienced arbitration as arbitration allows franchisees to settle matters promptly and outside of the public eye. In addition, franchise dispute arbitration is usually less costly than going to traditional court. Considering all of these, reaching an agreement will also have typical clauses that address the issue of dispute resolution. It is again a more efficient process than going through the legal process and courts and is often less costly. By going through arbitration, the parties agree to give up their rights to pursue the dispute in the courts. However, there is a problem that the arbitration prior to the agreement and under the terms would be contrary to the restriction of jurisdiction under the "ACT ON THE REGULATION OF TERMS AND CONDITIONS" in Korea.

• The Korean Journal of Franchise Management
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• v.13 no.4
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• pp.1-12
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• 2022

Purpose: In 2020, the franchise industry accomplished a significant growth compared to the previous year, as the number of franchise companies increased by 9.0% while the number of franchise brands increased by 12.5%. Despite growth in size, the Korean franchise industry underwent many negative incidents, such as franchise ownership sales to private equity funds, that led to deterioration of businesses. From this point of view, this study aims to make various proposals to help policy makers develop franchise industry policies by analyzing trends of the current and previous presidential administrations' franchise policies and regulations using newspaper articles. Research design, data and methodology: A total of 7,439 articles registered in Naver API from February 25, 2013 to November 29, 2021 were extracted. Among them, 34 unrelated video articles were deleted, and a total of 7,405 articles from both administrations were used for analysis. The R package was used for word frequency analysis, word clouding, word correlation analysis, and LDA (Latent Dirichlet Allocation) topic modeling. Results: The keyword frequency analysis shows that the most frequently mentioned keywords during the previous administration include 'no-brand', 'major company', 'bill', 'business field', and 'SMEs', and those mentioned during the current administration include 'industry' and 'policy'. As a result of LDA topic modeling, 9 topics such as 'global startups' and 'job creation' from the previous administration, and 10 topics such as 'franchise business' and 'distribution industry' from the current administration were derived. The results of LDAvis showed that the previous administration operated a policy based on mutual growth of large and small businesses rather than hostile regulations in the franchise business, whereas the current administration extended the regulation related to franchise business to the employment sector. Conclusions: The analysis of past two administrations' franchise policy, it can be suggested that franchisors and franchisees may complement each other in developing the Fair Transactions in Franchise Business Act and achieving balanced growth. Moreover, political support is needed for sound development of franchisors. Limitations and future research suggestions are presented at the end of this study.

• Journal of Digital Convergence
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• v.6 no.2
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• pp.77-86
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• 2008

This study investigated how the franchisor's supportive activities influence the franchisee's loyalty and consequently their perceived performance in the franchised restaurants. The study found that the franchisor could increase the franchisee's loyalty through supportive activities and the franchise performance in results. However, the franchisor's advertising and promotion supports did not influence the franchisee's loyalty increase, but increase the franchisee's perceived performance. In summary, supportive activities such as efficient franchise system and advisory activities could be a starting point towards high franchise performance.

• Journal of Distribution Science
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• v.9 no.2
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• pp.123-129
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• 2011

The restaurant franchise industry is one that could benefit significantly from the use of intranet technology, from its potential for improving communications between franchisors and franchisees, to providing easier inventory and ordering processes. However, there is a level of trepidation among potential users about whether the technology would improve their work performance. This study sought to examine the relationships between perceived uncertainty and perceived usefulness of intranet technology in the restaurant franchise industry. Through a review of available literature, 10 sub-dimensions of perceived uncertainty (Duncan, 1972) and six sub-dimensions of perceived usefulness (Davis, 1989) were derived. Canonical correlation analysis was used to examine the relationships between these concepts using data collected from 163 franchising restaurant managers in South Korea. Findings from the data analysis demonstrates two negative factors and one positive factor in perceived uncertainty that influence perceived usefulness, thus offering some implications of what to consider when implementing an intranet system in a restaurant franchise.

• Culinary science and hospitality research
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• v.12 no.4 s.31
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• pp.46-62
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• 2006

This study researched unequal trades and analyzed the difference of legal relation control between the franchisor and the franchisee in foodservice industry. The purpose of this study was the preparatory process for basic data to establish a statute law for the franchisee in foodservice industry. We made up a questionnaire for 53 franchisees in March 2004 and analysed spss 10.0. This result was as follows. First, the special office was needed for publicity activities of law related franchise and the investigation of a right in the written contract for a franchisee. Second, there should be the conformation and objective criteria of monopolistic goodwill in legal proceedings. Third, the larger the scale of franchisees was, the less efficiently the conflicts between franchisors and franchisees were controlled.

• The Journal of Industrial Distribution & Business
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• v.10 no.2
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• pp.39-49
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• 2019

Purpose - Customer loyalty and citizenship behavior are key success factors of franchise system. They make the management of franchisee more effective and efficient. Prior studies, however, mainly dealt with only acquisition utility of customer, such as perceived product/service quality and brand reputation to explain customer loyalty and citizenship behavior, which explains only on one side. We tried to investigate the effect of exchange utility of customer, such as relationship strength and psychological obligation together with the acquisition utility. In addition, we tried to investigate the relationship between customer loyalty and citizenship behavior in franchise context. Research design, data, and methodology - This study used data collected from the dining franchisee managers of 342 franchisors in South Korea. The franchisors consist of more than ten franchisees, the majority of which participated directly in the transaction with franchisor and have worked for more than six months. To test the hypotheses, the study used structural equation model analysis. Results - H1-1, 1-2, 1-3 predicted that acquisition utility would increase customer loyalty to franchisee. In support of H1-1, 1-2, 1-3, the results indicated that acquisition utilities such as perceived product value, perceived service value, and franchise brand reputation had positive effects on customer loyalty. H2-1, 2-2 predicted that exchange utility would increase customer loyalty to franchisee. In support of H2-2, the result indicated that psychological obligation had positive effects on customer loyalty like other acquisition utilities. However, H2-1 was not supported. Relationship strength had no significant effect on customer loyalty. H3 predicted that customer loyalty would increase customer citizenship behavior. In support of H3, the results indicated that customer loyalty had positive effect on customer citizenship behavior. Overall, the evidences generally supported the hypotheses. Conclusion - The results of the study show that not only acquisition utility but also exchange utility increases customer loyalty to franchisee and also show that customer loyalty increases customer citizenship behavior. Interestingly, however, relationship strength has no significant effect on customer loyalty. These results have two implications. The one is that increasing exchange utility can improve customer loyalty as acquisition utility can. The other one is that both of customer utilities can improve customer citizenship via customer loyalty.

• Journal of Distribution Research
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• v.16 no.5
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• pp.141-169
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• 2011

This study compares the business performances and the socioeconomic and sociopsychological characteristics of franchisees and independent business owners (IBOs). On the basis of extant theoretical arguments and empirical evidences it was expected that franchisees are different from IBOs in these aspects because unlike IBOs they are using franchising as their way of businesses and should satisfy the requirements imposed by franchisors. Analyzed in the current study was a national survey database of 424 franchisees and 5,690 IBOs compiled by the Small Enterprise Development Agency in 2011. As expected, it was found that franchisees were significantly different from IBOs in such traits as financial and managerial capabilities, business experiences, demographic and socio-psychological characteristics, information searching efforts, business performances, and their perceptions of business obstacles. It was also found that the effects of these traits on business performances were quite different between franchisees and IBOs. The findings of the current study provide some meaningful suggestions for government agencies. Given that franchises and IBOs have different traits, their demands for governmental policy should be different, and consequently, it might be argued that government agencies should treat the two groups separately and should increase their efforts to develop appropriate supporting policies for each group. With respect to franchisor's practices for franchisee selection, it is also argued that in order to enhance franchisee performances franchisors need to examine thoroughly the traits of prospect franchisees. This study concludes with discussion of several theoretical and methodological limitations for future research.