• Title/Summary/Keyword: franchising conflict

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An Exploratory Study on the Application Method of Social Franchising by Franchisee's Characteristics (가맹점주 특성에 따른 Social Franchising 개념의 적용 방식에 대한 연구)

  • Kim, Hyunsoon;Park, Ju-Young
    • Journal of Distribution Research
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    • v.17 no.5
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    • pp.25-38
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    • 2012
  • In general, commercial franchisors prefer franchisees with high entrepreneurship and business capability. However, these entrepreneurial franchisees with high capability tend to depend less on franchisors. Although franchisees with less entrepreneurship and low capability need intensive care from franchisors, some of them result in business failure due to improper supports from incapable franchisors. This paper suggests several propositions regarding social franchising's role in supporting the low-income urban people on the premise that social franchising or micro-franchising provides implications for franchisor strategic orientations for franchisees with little capital. Through literature review about social franchising and micro franchising, some implications are drawn. Many social enterprises use franchising to get growth and sustainability, because franchising allow social enterprise to expand its scale and to achieve economies of scale despite of its non-commercial and social purpose. And continuous support and training undertake the most important role to achieve its social purpose. In commercial franchising, especially small business format franchising sector, franchisor have to consider not only commercial purpose but also social responsibility because of low capability and less entrepreneurship of franchisee. If franchisor pursue only own profit, this can increase the conflict and franchise system failure. So far many franchisors are concerned with own profit and external growth. But it is necessary to consider symbiotic relationship, social responsibility and sustainability more for the sake of desirable industrial growth in the future.

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An Analytical Study on Differences between the Types of Disputes in Food Service Franchises and the Relevant Corporate Information (외식 프랜차이징 분쟁 유형과 기업정보 간의 차이분석 연구)

  • Kang, Seok-Woo;Rha, Young-Ah
    • Culinary science and hospitality research
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    • v.19 no.5
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    • pp.264-279
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    • 2013
  • This study aimed to analyze the differences between the types of disputes in food service franchises and the relevant corporate information. For this aim, the types of disputes were analyzed on the basis of the cases reported by the Korea Fair Trade Commission, and whether there are any differences from the relevant corporate information was analyzed using SPSS WIN(V.17.0). According to analysis results, the most often seen types of disputes were failure to provide the information disclosure sheet (58.5%) and failure to deposit franchising fee (15.1%). In Kruskal-Wallis test between the type of disputes and related corporate information variables, significant difference was found under significance level p<.05 for sales volume, the establishment period and the number of franchisees, and under p<.1 for the number of full-time employees. In correlation coefficient, the establishment period, the number of full-time employees and the number of franchisees showed positive correlation(p<.05), and the number of full-time employees showed correlation in the number of franchisees and the number of brands under the significance level p<.05. As a solution for the dispute, there should be franchisors' responsibility to comply with the principle of good faith, the authorities' strengthening exemplary transaction criteria and legal systems, as well as experts' consulting for prospective franchisees prior to establishing business.

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The Determination of Trust in Franchisor-Franchisee Relationships in China (중국 프랜차이즈 시스템에서의 본부와 가맹점간 신뢰의 영향요인)

  • Shin, Geon-Cheol;Ma, Yaokun
    • Journal of Global Scholars of Marketing Science
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    • v.18 no.2
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    • pp.65-88
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    • 2008
  • Since the implementation of economic reforms in 1978, the Chinese economy grows rapidly at an average annul growth rate of 9% over the post two decades. Franchising has been widely recognized as an important source of entrepreneurial activity. Trust is important in that it facilitates relational exchanges by permits partners to transcend short-run inequities or risks to concentrate on long-term profits or gains. In the relationship between the franchisors and franchisees, trust has been described as an important source of competitive advantage. However, little research has been done on the factors affecting trust in Chinese franchisor-franchisee relationships. The purpose of this study is to investigate what factors affect the trust in the franchise system in China, and to provide guidelines and insights to franchisors which enter Chinese market. In this study, according to Morgan and Hunt (1994), trust is defined as the extending when one party has confidence in an exchange partner's reliability and integrity. We offered a conceptual model of the empirical study. The model shows that the factors affecting the trust include franchisor's supports, communication, satisfaction with previous outcome and conflict. We also suggested the franchisor's supports and communication like to enhance the franchisee's satisfaction with previous outcome, and the franchisor's supports, communication and he franchisee's satisfaction with previous outcome tend to decrease conflict. Before the formal study, a pretest involving exploratory interviews with owners from three franchisees was conducted to make sure the questionnaire was relevant and clear to the respondents. The data were collected using trained interviewers to carry out personal interviews with the aid of an unidentified, muti-page, structured questionnaire. The respondents comprised of owners, managers, and owner managers of franchisee-owned food service franchises located in Beijing, China. Even though a total of 256 potential franchises were initially contacted, the finally usable sample consisted of 125 respondents. As expected, the sampling method was successful in soliciting respondents with waried personal and firm characteristics. Self-administrated questionnaires were used for all measures. And established scales were used to measure the latent constructs in this study. The measures tapped the franchisees' perceptions of the relationship with the referent franchisor. Five-point Likert-type scales ranging from "strongly disagree" (=1) to "strongly agree" (=7) were used throughout the constructs (trust, eight items; support, five items; communication, four items; satisfaction, six items; conflict, three items). The reliability measurements traditionally employed, such as the Cronbach's alpha, were used. All the reliabilities were greater than.80. The proposed measurement model was estimated using SPSS 12.0 and AMOS 5.0 analysis package. We conducted A series of exploratory factor analyses and confirmatory factor analyses to assess the convergent validity, discriminant validity, and reliability. The results indicate reasonable overall fits between the model and the observed data. The overall fit of measurement model were $X^2$= 159.699, p=0.004, d.f. = 116, GFI =.879, NFI =.898, CFI =.969, IFI =.970, TLI =.959, RMR =.058. The results demonstrated that the data reasonably fitted the model. We also examined construct reliability and reliability and average variance extracted (AVE). The construct reliability of each construct was greater than.80 and the AVE of each construct was greater than.50. According to the analysis of Structure Equation Modeling (SEM), the results of path model indicated an adequate fit of the model: $X^2$= 142.126, p = 0.044, d.f. = 115, GFI =.892, NFI =.909, CFI =.981, IFI =.981, TLI =.974, RMR =.057. As hypothesized, the results showed that it is strategically important to establish trust in a franchise system, and the franchisor's supports, communication and satisfaction with previous outcome tend to reinforce franchisee's trust. The results also showed trust seems to decrease as the experience of conflict episodes increases. And we also noticed that franchisor's supports and communication tend to enhance the franchisee's satisfaction with previous outcome, and communication tend to decrease conflict. If the trust between the franchisor and franchisee can be established in a franchise system, franchising offers many benefits and reduces many costs. To manage a mutual trust of relationship with their franchisees, franchisor's should provide support effectively to their franchisees. Effective assistant services have direct effect on franchisees' satisfaction with previous outcome and trust in franchisor. Especially, franchise sales process, orientation, and training in the start-up period are key elements for success of the franchise system. Franchisor's support is an accumulated separate satisfaction evaluation with different kind of service provided by the franchisor. And providing support definitely can improve the trustworthy image of the franchisor. In the franchise system, conflicts of interests and exertions of different power sources are very common. The experience of conflict episodes seems to negatively relate to trust. Therefore, it is important to reduce the negative side of the relationship conflicts. Communication actually plays a broader role in reducing conflict and establish mutual trust in franchisor-franchisee relationship. And effective communication between franchisors and franchisees can improve franchisees' satisfaction toward the franchise system. As the diversification of Chinese markets, both franchisors and franchisees must keep the relevant, timely, and reliable communication. And it is very important to improve the quality of communication. Satisfaction with precious outcomes seems to positively relate to trust. Franchisors and franchisees that are highly satisfied with the previous outcomes that flow from their relationship will perceive their partner as advancing their goal achievement. Therefore, it is necessary for both franchisor and their franchisees to make the welfare of partner with effort. Little literature has focused on what factors affect the trust between franchisors and their franchisees in China. This study developed the hypotheses regarding the factors affecting trust in the transaction relationship. The results of data analysis supported the hypotheses strongly. There are certain limitations in this study. First, we may point out that some other factors missed in this study could be significantly important. Second, the context of this study, food service industry, limits its potential generalizability for all franchise systems. More studies in different categories of franchise system are needed to broaden its generalizability. Third, the model was tested empirically in a sample in Beijing, more empirical tests of the proposed model in other Chinese areas are needed. Finally, the analysis in this study was solely based on the perception of franchisees and the opinions of franchisors were not included.

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Alleviating and Promoting Factors on Dissolution Intention in Low Commitment Buyer-Seller Relationships (저결속 구매자-판매자 관계에서 관계해지의 완화요인과 촉진요인)

  • 오세조;강보현;김상덕
    • Journal of Distribution Research
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    • v.9 no.3
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    • pp.21-47
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    • 2004
  • This study has investigated the effects of relieving and promoting factors on dissolution intention under the condition of low commitment buyer-seller relationships. Based on intensive literature reviews, eight alleviating factors (dependence, cooperation, communication, relational norms, transaction specific investments, relationship termination costs, satisfaction, and trust) and five promoting factors (opportunism, conflict, goal incongruity, attractiveness of alternatives, and unfairness) were included. A total of thirteen hypotheses were testee using data collected from a dining franchising system. Among 300 collected, 79 cases of low commitment buyer-seller relationships were analyzed. The results showed that eight out of thirteen hypotheses were supported. But five hypotheses related to the variables of cooperation, transaction specific investments, relationship termination costs, attractiveness of alternatives, and opportunism were not supported. following a detailed presentation of the analysis results, the paper concludes by discussing the academic and managerial implications of the findings.

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An Empirical Study on the Relationship between Selection factors of Franchise brand and Franchisee's Business Satisfaction, Performance (외식 프랜차이즈 브랜드 선정요인과 사업만족도, 성과 관계 연구)

  • Yang, Sook-Kyeong;Kim, Sun-Bae
    • Asia-Pacific Journal of Business Venturing and Entrepreneurship
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    • v.6 no.1
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    • pp.39-58
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    • 2011
  • The Study on the Influence of Selection factors of Franchise System and Franchisee's Satisfaction in the Food Service Franchise Industry. Franchisors can use franchisee selection criteria as a key input control to enhance the outcomes of their future franchisees. A business technique based on long term contractual arrangements between two legally independent businesses and relying on certain inputs from both parties for success and survival has significant potential for conflict. Furthermore,with many independent small businesses falling to reach their full potential, it is important to evaluate franchising as an alternative system of business management and to identify the characteristics of franchisor and franchisees which contribute to the satisfactory operation of a franchised small business. Thus, the objective of this study was to investigate a possible relationship between franchisee satisfaction and certain characteristics of the franchisor and of the franchisees themselves. In accordance with results of a hypothesis verification, a Selection factors of Franchise affects positively a Franchisee's Business Satisfaction.

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Importance of Partnership in Food Service Industry Franchise Enterprise (외식프랜차이즈기업의 파트너쉽의 중요성)

  • Lee, Jung-Chul;Shin, Kang-Hyun
    • The Journal of the Korea Contents Association
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    • v.9 no.6
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    • pp.390-398
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    • 2009
  • This study researches on the two types. First, Researched into important perception, relationship maintenance perception, relationship improvement, relationship recognition between franchisor and franchisee, Seconds, Researched into correlation between franchisor and franchisee at function achievement and relationship maintenance, conflict resolve and relationship maintenance, function achievement and compare with competitor. If franchisor with to experience the benefits of a strong franchise partnership, they must be willing to work on behalf of the partnership, perform roles that may extend beyond their traditional boundaries, and resolve their disagreement to the benefit of the partnership rather than to their own benefit. Strong partnerships require sacrifices on the part of both the franchisees and franchisors. However, These sacrifices have substantial payoffs in terms of franchisor performance as well as the performance of the relationship as a whole.