عوامل موثر بر فرانچایزینگ بازار متوسط هتل در کره : چشم انداز های فرانشیز (فرانچایز)

It is likely that the franchising of mid-class hotels will achieve success in Korea as in North America and some other parts of the world. This study examined franchisee perspectives in Korea. Using factor analysis technique, this study identified seven factors that were likely to influence franchise purchases: local environment, brand name, partner characteristics, support services, system quality, cost and communications. Multiple regression analysis was then applied to examine the relative importance of each of these factors in determining franchise purchase intention. In order of importance, partner characteristics, support services and cost were found to be the three most significant factors in determining purchase intentions. The study suggests that the franchising of mid-class hotels can be successful in South Korea, but some changes to traditional franchise methods may be needed.

The importance of franchising to the development of the lodging industry cannot be overstated. Franchising was the vehicle for the initial expansion of the motel segment in the 1950s in the United States (Brown & Dev, 1997). Franchising, which had seldom been used until the 1980s, has since been implemented in many European small and medium sized hotels (Connell, 1997). International franchising can play an important role in the Korean “middle market” hotel segment since franchising offers a less risky way to get into the hotel business, provides advantages such as world wide recognition of hotels by foreign travelers and standard services and products better than those found in many independent hotels. Tourist hotels consist of luxury A, luxury B, first, second and third class standards in terms of level of services in Korea. The middle market consisting of first class hotels represents 30% of total room supply in Korea. In general, middle market hotels have excellent locations. Middle market hotels are cheaper than luxury hotels but provide limited services. For example, the operation is more focused on rooms rather than food and beverages when compared to luxury hotels. A typical hotel in the middle market has 100 rooms and one or two restaurants while a typical luxury hotel has 400 rooms, five or six restaurants and other facilities. According to The Korea Tourist Hotel Association (2002), the ratio of room to food and beverage sales is 52–48% among middle market hotels. This is quite different from luxury hotels whose sales ratio of room to food and beverage is 40–60%. There is a high potential for profit for middle market hotels due to location, price and a good match between service and product attributes for the price sensitive traveler demand. However, a low recognition of hotels by foreign travelers and a lack of standard services and products impede the maximization of the segment’s profitability. In fact, few foreign travelers stay at middle market hotels, which are domestic and independent. Therefore, it is essential to promote middle market hotels more aggressively through internationalization to attract foreign travelers in Korea (Cho, 1999). The purpose of this study is two-fold. The first is to identify the underlying dimensions or factors considered when Korean independent middle market hotels purchase franchisee rights. The second is to examine the relative importance of the derived factors in relation to franchise purchase intention. Hotel franchise companies, especially international companies, who want to buy or sell hotel franchises are faced with a problem of which factors will contribute to a successful franchising agreement. The problem is that there is no comprehensive source of information on this aspect of the Korean hotel industry. Therefore, systematic analyses of franchise purchases are quite timely and useful to both franchisors and franchisees. It is hoped that this study will help hotel franchise companies and prospective Korean hotel franchisees because both have a mutual interest in matching each other’s needs and operating a successful business.

Government incentives as well as the high potential profitability motivated investors to develop middle market hotels in Korea. The recent entrance of international hotel chains to Korea shows they are ready to explore a middle market niche. Novotel, Ibis, Holiday Inn, Ramada Inn, Four Points and Best Western have already launched chains and plan to convert more independent hotels in the middle market into international chain hotels by means of franchising. Furthermore, new local brands such as Geoville and Geolodge are ready to emerge in the middle market to attract independent properties through franchising. In Korea, the operators of independent middle market hotels are starting to be aware of and interested in franchising that may be suitable for middle market hotels to help to maximize recognition of their hotels by foreign travelers and provide required standard services and products. Therefore, an investigation of perceived important factors in middle market hotel franchising and their relationships with the franchising purchase intention is warranted. This study has identified seven factors that are deemed important to Korean middle market hotel franchising from the franchisee perspectives. The seven factors are local environment, brand name, partner characteristics, support services, system quality, cost and communications. Of these factors, partner characteristics, support services and cost are considered to be the influential factors for franchising purchase intention. In general, traditional franchising may not be applicable for Korean middle market hotels. In order for franchising companies to overcome the resistance of prospective franchisees, they should introduce new methods of franchising for Korean middle market hotels. It is recommended that franchising companies select local partners who have previous hotel business experience and appropriate entrepreneurial personality traits. In addition, they need to consider the demographic characteristics of local partners. Also, it is recommended that given the fact that brand name factor was found not to be statistically significant in influencing franchising purchase, franchising companies who have a weak brand name but propose more attractive cost factor conditions such as fees and contract term length may succeed. In addition, it is desirable to continually reinforce the auxiliary service factor to reduce resentment about fees while providing management autonomy for Korean middle market hotels. Despite the fact that middle market hotel franchising is promising in Korea, there have been limited attempts to evaluate empirically the factors contributing to franchise purchase, particularly from the perspective of franchisees. The findings in this study are considered useful to middle market hotel franchising companies who are going to enter Korea as they provide a clear indication on how to improve their negotiation power. This study provides useful and effective ways for them to identify potential concerns that are likely to occur, and to understand why. Once the factors in relation to franchise purchase are recognized, they are more likely to able to anticipate and cater for prospective franchisees’ desires and needs. Nonetheless, significant caveats exist that limit the findings derived from this study. First, although the study was targeted at middle market hotel franchising, it investigated the perspectives of management people of luxury hotels invested in by Chaebols and/or operated by management contracts since there are no franchised middle market hotels in Korea. Second, this study did not investigate the nature of the impact of attributes by order of importance. For example, an attribute such as size can have different levels such as 50 room, 100 room or 150 rooms and these levels can have different impacts on franchising. Level of sales, demographics and experience are other examples of this limitation. Finally, it is worth restating that until very recently the Korean hotel sector had little or no experience of franchising. Thus the respondents replied on the basis of perceptions, but their actual knowledge of franchising was neither tested nor revealed. Hence, the study is based on attitudes that may range from ill-informed to highly knowledgeable.