• Culinary science and hospitality research
• /
• v.14 no.3
• /
• pp.69-84
• /
• 2008

The franchise business in Korea, having a relatively short history compared to those of the advanced countries, disclosed many problems between franchisors and franchisees due to a rapid growth in number for the short period of time. Having recognized these problems, the Korean government, responding to social demands, established "The Fair Trade Practices Law for Franchise Business" to restrict unfair trade practices and to develop a healthier franchise business practice in general. In this study, we closely examined how the franchisees' understanding of the related laws would influence the franchisees' countermoves and satisfaction and the franchisor's reactions from the franchisees' standpoints. In conclusion, the franchisees show higher satisfaction in heteronomous changes achieved by the mutual agreement with the franchisors rather than in autonomous changes achieved by their active pursuits, as seen from the interrelation of the franchisors' reactions and the appropriateness of franchise agreements.

• The Korean Journal of Franchise Management
• /
• v.11 no.4
• /
• pp.45-57
• /
• 2020

Purpose: The purpose of this study is to determine the importance and priority arising from the relationship between MRO-office supplies franchisor ("franchisor") and franchisees through an in-depth investigation. In particular, with respect to the MRO-Office franchise industry, we would like to make meaningful contributions in the decision-making process by comparing and contrasting factors that affect the importance and priority of communication, conflict, support and satisfaction through AHP analysis. Research design, data, and methodology: After completion of AHP analysis, the study will also identify factors in order of priority and factors of importance between the franchisor and franchisees. Another purpose of this study is to evaluate and propose business relationship strategies between the franchisor and franchisees. Through AHP analysis, this study will facilitate the relationship between the franchisor and franchise, and determine the factors of importance and factors in order of priority. Result: This study evaluates the differences and priorities of the two groups arising from the relationship between the franchisor and the franchisees through AHP analysis after separately analyzing the franchisor. In this study, the franchisees find that communication is the most important factor, then support as the second most important factor between the two groups. In contrast, the franchisor finds that support is the most important factor followed by communication between the two groups. Conclusions: This analysis demonstrates the discrepancy in evaluating important factors from the perspectives of the franchisor and the franchisees. The largest discrepancy between the franchisor and franchisees comes from an information system related to communication factors. This effectively means that the franchisor has an understanding of this inadequate information system on the part of franchisees but this understanding is not deemed an important factor. The franchisees recognize and focus on the need to obtain feedback from the franchisor regarding management improvement as the most important factor rather than the ability of the franchisor to guide them through the franchisees' operations. To this end, the franchisor should be more flexible in dealing with the problem of improving the work required by the franchisees. For this study, a survey was conducted on employees of MRO-office supplies franchisor, franchisees, and employees and completed based on AHP analysis.

• The Korean Journal of Franchise Management
• /
• v.8 no.1
• /
• pp.5-18
• /
• 2017

Purpose - Although literature has established the relevance of entrepreneurial orientation(EO) in the performance of conventional firms, the constraining nature of franchise arrangement makes one wonders if the same relationship holds for companies operating under the business model. Research design, data, and methodology - Using Nigeria - a country with high potential for franchise growth - as a context, this study aims to explore the relevant entrepreneurial orientation skills exhibited by franchisees and show the extent to which these skills influence their business performance and intention to remain. 26 franchisees purposively selected from six local franchise brands in Nigeria were interviewed. Result and Conclusions - The three classic entrepreneurial orientation factors of innovativeness, proactiveness and risk-taking were found to have varying influence on franchisees' business outcomes. This study answers the calls for more in-depth understanding of the relationship between EO and firm performance generally and, franchise firm performance in particular. The value of this effort lies in the fact that it strengthens theory and updates literature on the subject. Based on the findings, specific recommendations are offered to help improve the practice of franchising in Nigeria.

• Journal of Distribution Science
• /
• v.12 no.12
• /
• pp.119-130
• /
• 2014

Purpose - Franchise industries are significant both socially and economically. However, with increasing interest, there are manifold problems. It is necessary to seek measures for mature operation constantly despite unprepared franchisors, negative perceptions of the media and society toward franchise, and rapid changes in business start-up trends and propensity to consume that make business start-ups difficult. The paper aims to explain the effects of relational commitment and performance on the franchisor's management characteristics and justice in the food service franchise system. Research design, data, and methodology - This is an exploratory survey examining franchising in Korea. Based on a literature synthesis, we extract five constructs: managerial characteristics, support, fairness, trust, and satisfaction. We hypothesize that these factors influence the trust, satisfaction, and performance of franchisees. To examine these hypotheses empirically, we conducted a survey on the database of the Franchising Council of Korea. The study employs data from May to September 2014. In total, 135 completed questionnaires were received, of which 128 were usable. The data was analyzed with SPSS/PC 22.0. First, to test unidimensionality and nomological validity of the measures of each construct, we employed a scale refinement procedure. The result of a reliability test with Cronbach's α and factor analysis warranted unidimensionality of the measures for each construct. In addition, nomological validity of the measures was warranted from the result of the correlation and regression analysis. By analyzing the data, we can confirm most hypotheses. Results - Frist, franchisor characteristics have a positive effect on trust and satisfaction. Second, franchisor fairness has an effect on trust and satisfaction. Third, franchisor support has an effect on satisfaction. Further, the franchisee trust has an effect on satisfaction. Fourth, the satisfaction of a franchisee with a franchisor affects the performance of a franchisee. Finally, there is a possibility that not only franchisee performance but also increasing the credibility and improving the image of the franchisor through communication between franchisor and franchisee can improve franchisees' performance and satisfaction by motivating the franchisee for sustainable growth. Franchisers should endeavor for franchisees to obtain stable revenue with continuous and practical support. They should recognize that they can expand their business by supporting their franchisees. Franchisors should not only instantly respond to franchisees' troubles with interactive communications but also raise the ability of supervisors for better support. Franchisors should share their visions and goals with their franchisees and provide systematic and continuous support based on trust and clear company management. Franchisees should understand franchisors' position as well as participate in establishing the basic franchise system. Contributions - The paper contributes to understanding franchising in Korea. It offers insights and assistance to franchisors hoping to start franchises. This paper explores measurement issues related to franchisee performance by estimating its determinant factors (managerial characteristics, support, fairness, trust, and satisfaction). This study provides franchisors and practitioners planning to extend their franchising business with some practical knowledge.

• Journal of Distribution Science
• /
• v.17 no.9
• /
• pp.67-81
• /
• 2019

Purpose - The overarching aim of this study is to empirically test the effect of ex-post control mechanisms on multi-dimensional trust and channel performance in franchise systems. Although the franchise system is a vertical marketing channel based on trust between the franchisor and the franchisees, issues related to franchisee's opportunistic behavior have persisted and thus requires research into the effective control system of franchise headquarters. Research design, data, and methodology - In this study, data was collected from 150 franchises to identify the effect of two types of franchising headquarters' control system on the multi-dimensional trust and franchise channel outcome between franchisor and franchisee. To test the hypotheses intended to achieve this aim, structural equations modeling technique is utilized. Results - The results of this research reveal that among the two formal control systems studied (output and process control), output control positively and significantly affects multidimensional trust. Additionally, among the three dimensions of trust employed in this study, only expertise has a positive and significant effect on contract compliance. Equally, only expertise and integrity have a negative and significant effect on opportunistic behavior. Conclusions - The study provides managerial and theoretical insights into understanding ex-post control mechanisms, trust, compliance and opportunistic behaviors in franchise systems.

• Culinary science and hospitality research
• /
• v.19 no.1
• /
• pp.57-69
• /
• 2013

This study analyzed the effects of the relational norm factor of food service franchising on the intention to remain, in view of the importance of relational norms, as antecedent variables, to franchisees' perceived fairness to enhance the competitiveness by formation of long-term relationship between interested parties to food service franchising, the franchiser and the franchisee. According to a questionnaire survey, more than 100 franchisees that recorded three business years in Seoul, Incheon and Gyeonggi area were selected for convenience sampling. Then, among them, 515 effective samples were analyzed. For statistical data, detailed types of analysis were performed by using AMOS 17.0, such as factor analysis, exploratory factor analysis, confirmatory analysis and frequency analysis. The purpose of this study was to examine the relationship between the franchiser and the franchisee by arranging relational norm factors for the relationship to be suitable for the current situation of Korea, instead of Western-style theory-based relationship marketing, and by understanding a connection between perceived fairness and management achievement-related variables, and to make a conceptual framework for building a positive relationship between the franchiser and the franchise in future food service franchising industry. Moreover, it aimed to increase franchisee satisfaction and results including re-contract according to perceived positive relationship value on the franchiser and to make contribution to find and show the proper direction for development of the Korean-style food service franchising system.

• The Korean Journal of Franchise Management
• /
• v.3 no.2
• /
• pp.55-78
• /
• 2012

The purpose of this study is to devise successful strategies for launching of new brands in franchise companies based on cases of 'Gamarogangjung' of Masedarin Inc. The results of case analysis shaw following successful strategies. First, Masedarin Inc. has used its core competence; Masedarin Inc., which managed chicken franchises for many years, launched the new brand, 'Gamarogangjung' based on its differentiated technologies and infrastructure. Second, the brand, 'Gamarogangjung' has used market oriented strategy actively; the brand has reflected customers' needs to its adminstration immediately by understanding and sharing of customers' needs at the corporate level. Third, Masedarin Inc. has differentiated a business model from other companies; by using 'take out' purchasing system instead of 'delivery to doors' or 'purchasing by visiting', the company has saved huge management cost. Fourth, Masedarin Inc. developed a new kind of business which is differentiated from existing chicken franchise brands or take-out restaurants. Fifth, Masedarin Inc. has appealed its sincerity to franchisees; its business information session, which explains about the business openly without exaggeration, has drawn a high rate of franchise agreement. Sixth, Masedarin Inc. changed its way of thinking about conditions of a location for member stores. The company has selected 'A' level locations for their member stores which enables 'quick sales at small profits' while other take-out stores are usually located at 'B' level location. Lastly, Masedarin Inc. has given thorough instructions to the staff of member stores. And immediately after opening of the stores, franchisees were able to operate the stores comfortably because the company educated the staff repeatedly over a long period to make them master skills before the opening of the store.

• The Korean Journal of Franchise Management
• /
• v.5 no.1
• /
• pp.109-141
• /
• 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 Korean Journal of Franchise Management
• /
• v.2 no.1
• /
• pp.173-199
• /
• 2011

A franchisee has to depend on the overall system, such as knowhow and management support, from a franchisor in the franchise system and the two parties do not start with the same position in economic or information power because the franchisor controls or supports through selling or management styles. For this, unfair trades the franchisor's over controlling and limiting the franchisee might occur and other side effects by the people who give the franchisee scam trades has negatively influenced on the development of franchise industry and national economy. So, the purpose of this study is preventing unfair trade for the franchisee from understanding the causes and problems of dispute between the franchisor and the franchisee focused on the dispute cases submitted the Korea Fair Trade Mediation Agency and seeking ways to secure the transparency of recruitment process and justice of franchise management process. The results of the case analysis are followed; first, affiliation contracts should run on the franchisor's exact public information statement and the surely understanding of the franchisee. Secondly, the franchisor needs to use their past experiences and investigated data for recruiting franchisees. Thirdly, in the case of making a contract with the franchisee, the franchisor has to make sure the business area by checking it with franchisee in person. Fourthly, the contracts are important in affiliation contracts, so enacting the possibility of disputes makes the disputes decreased. Fifthly, lots of investigation and interests are needed for protecting rights and interests between the franchisor and franchisee and preventing the disputes by catching the cause and more practical solutions of the disputes from the government.