• THE INTERNATIONAL COMMERCE & LAW REVIEW
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• v.67
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• pp.49-68
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• 2015

In recent years in China, corresponding to a shift in consumption pattern from household basics to greater expenditure on quality of life, new franchising opportunities arise. Although the franchising prospect in China is promising, Korean companies aiming at franchising into China need to be aware of the legal framework for commercial franchise in China as this will have direct impact on their business expansion. Where franchising activities involve trade mark licence, Chinese Franchise Regulations require such trade mark licence agreement to be regulated in accordance with the relevant provisions of the Chinese Trademark Law. Furthermore where one party fails to perform his obligation and it impacts purpose of the contract seriously, the other party could avoid the contract in accordance with the relevant provisions of the Chinese Contract Law. To launch franchising business successfully in China, Korean companies do market research sufficiently before they may commence franchise business. Korean franchisor must register with local authorities in China by own name, and make Chinese partner take charge of management of the distribution network and invitation of franchisee partners.

• Journal of Distribution Science
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• v.18 no.5
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• pp.35-47
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• 2020

Purpose: In the highly competitive franchise market, the perceived entrepreneurial passion and emotions of customers are very important, because it impacts on the success of companies. Thus, the purpose of this paper is to suggest how the impact of the franchise entrepreneurial passion and positive emotions on the brand trust and loyalty of customers. Research design, data and methodology: This study analyzes data was collected through questionnaires on customer(n=480) who had visited franchise restaurants. Analysis of used collected data was based on the mix method using quantitative and qualitative comparative analysis. Results: The quantitative analysis results showed inventing passion, developing passion, positive emotions that perceived by customers have a positive impact on brand trust. On the other hand, founding passion did not have an impact on loyalty in quantitative analysis. but when combined with developing passion in qualitative comparison analysis, but when combined with developing passion in qualitative comparison, that became the sufficient condition of high loyalty of customers. Conclusions: The franchisor of the Korean franchise industry is indiscriminately overusing the founding franchisees, causing social problems. In this situation, founding passion can have a negative impact on customers. Therefore, the franchisors must have management capabilities by strictly managing the founding rules of the franchisee and disclosing the corporate vision.

• The Journal of the Korea Contents Association
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• v.7 no.7
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• pp.124-132
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• 2007

In hospitality industry many firms choose the franchise system in order to enlarge their market share and to decrease risks. Small businessmen also accept the franchise contract as a good way of starting their business. With the contract franchisees take advantages of marketing, fiance, and operations from franchisers by paying several related fees or royalties. In this study factors influencing franchisees' satisfaction for the contract were identified. And the study also found that there was a significant difference in the degree of influencing among the factors.

• Journal of Distribution Science
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• v.13 no.8
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• pp.41-48
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• 2015

Purpose - This study's objective is to confirm the effects of the perceived relationship value, alternative attractiveness, and investment size on Korean food service franchisees' commitment, using an investment model. Among the three factors, the study examines which factors enhance or weaken the commitment in the franchising investment model. Research design, data, methodology - The data were collected from 495 franchisees and analyzed by a SEM (Structure Equation Model) using path analysis by SPSS 18.0 and AMOS 18.0. Results - 1) The perceived relationship value has a positive effect on franchisee commitment. 2) The alternative attractiveness has a negative effect on franchisee commitment. 3) The investment size has a positive effect on franchisee commitment. Conclusions - The findings show that the investment model can be adapted to franchising and confirms previous investment model study results. We can assume that the higher the perceived relationship value and the bigger the investment, the stronger the commitment, and the greater the alternative attractiveness, the weaker the commitment. These results offer managerial implications for a franchisor wanting to strengthen franchisee commitment.

• Culinary science and hospitality research
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• v.14 no.2
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• pp.153-169
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• 2008

The purpose of this study is to determine the effects of production strategies operated by franchisors in the food service industry on the franchisees' culinary competence and subsequently franchisees' satisfaction with performance and recontract intention. In order to accomplish this purpose, two franchised enterprises which used mass-purchasing and mass-producing before distributing to each franchisee for the production strategies were participated and eventually 287 franchisees responded to this survey. Factor analysis and Cronbach's alpha showed the validity and internal consistency for the survey questionnaire. LISREL(8.72) was used to test the relationships between variables; production strategy, culinary competences, franchisee satisfaction, and recontract intention of the franchisees. The results present that the franchisees' satisfaction with the management system, quality of distribution, and quality of foods influenced on differentiation performance and supply performance of franchisees. On cost performance, only satisfaction with the food cost had an impact. The higher franchisee satisfaction with the franchisees' operations was, the higher recontract intention was in the franchise business. The results suggest the critical points for improving foodservice supplying system as well.

• The Journal of Asian Finance, Economics and Business
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• v.9 no.4
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• pp.99-107
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• 2022

Franchising is one of the most interesting areas of management research, attracting researchers and practitioners from all over the world. Many factors that drive franchising intention have been identified by previous researchers. They also demonstrated that there are numerous research gaps in this subject that must be filled. The primary goal of this study is to identify and test new factors of franchising intent. Finally, to clarify the role of these components, this study used the Motivation - Opportunity - Ability paradigm. To test the hypothesis, SmartPLS software was used to evaluate a total of 252 valid questionnaires collected from small and medium businesses in Hanoi, Vietnam. The findings revealed that franchisee motivation, franchisor support, and asset specificity have a positive impact on franchising intention. In whatever case, the opportunity has the greatest impact on participation intentions. In terms of the impact level on SMEs' intentions in the franchise system, ability comes in second. Furthermore, the moderating influence of franchisee asset specialization in the relationship between opportunity and franchising intention is confirmed by this study. This study examines the theoretical and practical contributions, as well as their limitations, and suggests some future research on the subject.

• KDI Journal of Economic Policy
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• v.44 no.1
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• pp.49-75
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• 2022

This paper analyzes how franchise contract conditions are influenced by business structures as well as how contract conditions affect producer surplus by utilizing Korean franchise Information Disclosure Documents for the years 2014-2016. We find that franchise fees tend to increase in line with increases in the numbers of direct stores or the business period. Accordingly, it would be reasonable to check whether the franchise fee is excessive compared to the amount of reputation capital rather than to criticize the absolute level of the franchise fee. Regarding royalty contracts, the larger the discount in the raw materials purchase is, the higher the initial royalty is. Although this appears to be a royalty discount, it can be a means of inducing a raw materials purchase contract by initially setting a high royalty rate and then lowering it after the purchase contract is signed. Concerning the effect on producer surplus, the results show that an increase in franchise fees and royalties negatively affects the franchisee's operating profits but positively affects those of the franchisor's, leading to conflicts over the distribution of economic value added. Based on the findings here, we propose various policy recommendations, specifically reinforcing the contents in the Information Disclosure Document, further activating fixed-rate royalties, and strengthening the qualifications of franchisors when recruiting franchisees.

• Journal of the Korean Society of Food Culture
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• v.24 no.4
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• pp.413-418
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• 2009

Existing literature on the CRM [Customer Relationship Management] has emphasized the marketing strategies between the franchisor and franchisee. In this study, we focused instead on factors involved in forging relationships based on marketing strategies between franchisee and the customers. A survey questionnaire was completed by 250 customers of Korean-style food franchises located in Seoul and Inchon. Each questions is based on a 5-point likert-type scale. After initial data recording, 41 questionnaires were deleted from the data set because of missing or insincerely answer. Finally, the sample data of 209 questionnaires were used for the statistical analysis. The data were analyzed with SPSS version 13.0 software to assess consumer satisfaction, trust, and support/reputation on flexibility and commitment. Regression analysis was performed to analyze the relationship between flexibility and commitment. Satisfaction and support/reputation significantly influenced flexibility, both satisfaction and trust significantly influenced commitment, and both flexibility and commitment significantly influenced the restaurant-consumer relationship.

• The Korean Journal of Franchise Management
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• v.6 no.2
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• pp.51-66
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• 2015

As competition for better service between corporations is getting fierce, many efforts to improve service quality are being made endlessly. The quality of service is directly associated with customer satisfaction and the employee performance of emotional labor is a key factor to attain a high level of customer review and better corporation image. This study examines an influence of emotional labor on job stress and customer orientation in the context of a service franchise firm. The results are as follow. First, deep acting of emotional labor has a negative influence on job stress, and surface acting of emotional labor has a negative influence on customer orientation. Also, job stress has a negative influence on customer orientation. Second, deep acting of emotional labor does not have a positive influence on customer orientation. Third, surface acting of emotional labor does not have a positive influence on job stress. The findings of this study show that deep acting of service based on an employee emotion can produce the employee's better service attitude by decreasing employees' job stress, but standardized surface acting of service cannot. Therefore, franchisor needs to use employees' deep acting to improve the franchisee service quality.

• Journal of Distribution Science
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• v.16 no.11
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• pp.65-72
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• 2018

Purpose - The purpose of this research is to investigate the effect of ex ante governance mechanisms that can be exercised by franchisers on franchise contract compliance and various relationship outcomes. There are many previous studies on control mechanisms in inter-firm relationship, however, most studies focus on ex post governance mechanisms and identify the effects of behavior control and outcome control on performances. Based on transaction cost theory and agency theory, this study defines the ex ante governance mechanisms of franchisers as contractual completeness and extra contractual incentives. The author have examined the two ex ante control mechanisms on contract compliance, recontract intention, multi-shop running intention and opportunistic behaviors of franchisee. Research design, data, and methodology - In this study, 137 questionnaires of food and beverage franchise stores were collected through a specialized research company. The reliability and validity of the variables were analyzed using SPSS 18.0 and AMOS 18.0 programs and hypotheses were verified through the structural equation modeling. Results - As a result of hypothesis testing, contractual completeness and extra contractual incentives have a positive effect on the contract compliance of the franchisee. It is shown that franchisee's contract compliance has a positive effect on recontract intention and multi-shop running intention and has a negative effect on opportunistic behaviors. Conclusions - This study examines the ex ante governance mechanisms such as contractual completeness and extra contractual incentives, which is relatively rare compared to ex post governance mechanism in B2B relationship. According to the results of this research, these two tools can be used as ex ante control mechanisms for franchise headquarters to use their franchisees. In addition, franchisee's contract compliance affects various relationship outcomes between franchisor and franchisees.