Are franchise royalty fees related to franchisors’ support of franchisees? Evidence from the restaurant industry

Bang, Dohyung; Kyuwan, Choi; Jang, SooCheong

doi:10.1016/j.ijhm.2023.103555

Cited by 1 publication

(7 citation statements)

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“…There are seven factors that affect a decision made before choosing to invest or not invest in a franchise business: initial fee [45,[54][55][56], benefits [43,57], investment risk [31,58], franchise products [47,51,57], reputations of the franchise [34,55], franchise experience [58,59], and support of the franchise [3,38,59,60]. Moreover, in this research, there are three factors influencing the behavior of franchise investors after investment: continuous investment [29,61], word of mouth [52,53,[61][62][63], and franchise loyalty [64,65]. Therefore, in this research, a total of 10 factors influencing decisions made both before and after investments are included in this research.…”

Section: Factors Influencing the Decision Makingmentioning

confidence: 90%

“…The "franchise fee" [45,54,56] is something franchise investors and sellers must understand well. Setting an appropriate investment price varies according to brand and business plan for the benefit of both parties [64]. Because of the fee collection, we must find a balance point.…”

Section: Pre-purchase Decision Makingmentioning

confidence: 99%

“…The decision to set the price should align with the franchise's marketing concept, rather than based on whether it is too high or low [45,54,71]. An appropriate price will ensure that investors understand the importance of the franchise brand and are willing to invest in it [64].…”

Section: Pre-purchase Decision Makingmentioning

confidence: 99%

“…If a product is of low quality, consumers will not repurchase the product. If the product price is too high and beyond the purchasing power of consumers, the product cannot be sold, and franchise investors may not invest anymore [64].…”

Section: Franchise Productmentioning

confidence: 99%

“…The franchisor's activities in support of the franchisee include sales support, continuous ongoing advice and consultation, research and development, advertising and promotion, and training for successful franchisees [65]. The concept of franchise support includes sales/field support, ongoing advice and consultation, research and development, advertising and promotion, and supplier selection [59,64]. The study results found that franchise investors were satisfied with every aspect of the franchisor's support and that the franchise owner was satisfied with the relationships between franchise owners and franchise investors [1,6,30].…”

Section: Franchise Supportmentioning

confidence: 99%

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Conceptual Models of Franchisee Behaviors in the Dietary Supplements and Cosmetics to Imply the Business Investments

Suttidharm,

Leelasantitham

2024

Sustainability

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Franchise businesses have demonstrated resilience before, through, and after the circumstances of COVID-19. This can be attributed to the inherent appeal of rapid success and risk mitigation for investors. Therefore, investors are attached to engaging in a franchise business model. Fierce competition exists among franchise businesses, with numerous brands within the same industry, especially the cosmetic and dietary supplement franchise category, which has garnered significant popularity in Southeast Asia, particularly Thailand. The expansion of this franchise category has accelerated, surpassing the growth rates observed in other countries. Investment decisions across various investor levels are influenced by diverse factors, including intense competition, contributing to the rapid expansion. Therefore, a comprehensive study and understanding of the investment behavior of cosmetic and dietary supplement franchise businesses has become imperative. The success of a franchise business hinges on different factors encompassing decisions made before, during, and after investments. This study delves into the decision-making behaviors preceding and following investments across different investor levels in the cosmetics and dietary supplement franchise industry, utilizing fundamental aspects derived from rational choice theory (RCT) and additional variables. The researcher gathered responses through questionnaires from 490 respondents with investment experience in the cosmetics and dietary supplement franchise business. The study revealed that factors postulated in this study significantly influenced investment choices within cosmetics and dietary supplement franchises. When segmented based on investor levels, distinct considerations emerged for each group. Furthermore, there is a compelling need for cosmetic and dietary supplement franchise owners to implement enhancements in services to uphold and expand investor bases, representing an intense challenge in the cosmetics and dietary supplement franchise business nowadays. This study is intended only for individuals with prior investment experience in the cosmetics and dietary supplement franchise industry. It focuses on examining the factors that influence investment decisions both before and after the initial investment, particularly with regard to dietary supplement and cosmetics franchises.

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