Franchise System is a distribution model that is popular in developed countries. Also, it has shown very rapid growth mainly from the foreign famous brands in a domestic market since the opening of the distribution market. The fast growing of the dome...
Franchise System is a distribution model that is popular in developed countries. Also, it has shown very rapid growth mainly from the foreign famous brands in a domestic market since the opening of the distribution market. The fast growing of the domestic franchise industries is expected to be the result from the expectations about low percentage of failure compared to the personal founding and an increase in interests over the small-budgeted businesses after the financial crisis of 1997. The core value of the franchise businesses can be the strategic business promotion structures through the franchise supporting system. Therefore, the relationship between franchise headquarters and the affiliates of the franchisee is essentially very close. The appropriate relationship management of two parties must be very important. It is well-known fact that the franchise satisfaction is essential in running franchise businesses through the scholars, who are researching about the franchising, and the practitioners.
For most domestic affiliates, since the franchisees rather directly provide services more than its employees, it is very important to study about the relationship between the customer satisfaction and the franchisees. Thus, this study is trying to find out about how the franchisee satisfaction and the service orientation effected on the customer satisfaction and the perceived customer value. Accordingly, by reviewing over the previous researches, this study inquired about the franchisee's satisfaction toward the franchise head quarters and the service orientation. It has examined the factors, such as customer value, satisfaction and the loyalty, that the customers feel toward the affiliates. In addition, it has empirically analyzed about whether the service orientation and the satisfaction of the franchisees have the direct effect over the customer value, the customer satisfaction and the loyalty. Samples were the franchisees, who directly provide services like the employees and run the franchise affiliates in the Daegu and Gyeongbuk. Customer samples were from the customers who used previously selected affiliates. This study used LISREL 8.80 to analyze total 988 questionnaires, 741 from the customers and 247 from the affiliates. As a result of this study, the franchisee satisfaction and the service orientation have a significant effect on the customer value, the customer satisfaction and the loyalty.
The theoretical implications of this study are as follows. Foremost, it has implication that it has found the relationship between the franchisee satisfaction and the customer satisfaction that has not researched previously. Second, this study, through researching about the detailed relationship between the three dimensions of the customer value and the four dimensions of the franchisees' service orientation, has found out that how each dimensions of the service orientation take direct effect on the each dimensions of the customer value. Third, it is meaningful that it has structurally understood through analyzing a big framework that consists of the franchisee satisfaction, the service orientation, the customer value, the customer satisfaction and the loyalty. The managerial implications are as follows. First, a result that the service leadership and the service system of the four dimensions of the service orientation have no effect on the social value of the customer value, offers a big implications to the franchisees who run the small affiliates. This implies that the management of services encounters and the human resources is very important for the franchisees of the small affiliates. In other words, how to utilize the encounters or how to manage the human resources can be the way to enhance the customers' social value toward the small affiliates. Second, the fact that functional value has high effect on the customer satisfaction instead of no effects of social value on the customer satisfaction is noteworthy. This implies that maintaining high quality for money is necessary in order to lead temporary satisfaction of the customer. Lastly, it is very important that the fact which franchisers can satisfy the franchisee by implementing persistent instruction, support, training, communication and others. Futhermore, it can lead to an increase in sales through the customer satisfaction. In addition, it could be possible to form a powerful ties from the customers if the franchise system offers the differential products and services which can lead the customers to form a positive attitude toward the small affiliates.