The Effect of Ex-ante Governance Mechanism of Franchise Headquarter on Franchisee’s Multi-dimensional Trust-Commitment and Relationship Performance to Franchise Headquarter*

Purpose: Korean franchising industry has been rapidly growing since its introduction in the late 1970s. As of 2017, as a result, accounted for 6.9% South Korea’s nominal GDP-which is 1,730 trillion won- and employment 4.5% economically active population Korea. Furthermore, statistics index shows that there are 4,882 franchise headquarters Korea, this exceeds figure U.S. Japan, which number approximately 3,000 1,339 respectively. Various advantages system recognized an attractive business model not only by founders but also businesses. Franchise headquarter franchisee legally independent with different objectives interdependent, constructs diversified organizational structure makes it difficult customers to distinguish two partners. The unique contract form various governance franchisor affect relationship between well franchisee’s performance. Therefore, need understand one another’s stance make concerted effort develop based on principle reciprocity. This research focused long-term franchisee, partners pursue mutual growth. Under relationship, author aimed out mechanism affects trust commitment toward headquarter. purpose paper analyze outcome, especially opportunistic behavior continuity, from point view. distinctive preceding examines ex-ante inspects effect ex-post simultaneously single model. study shown Figure 1. 1 Conceptual framework Results: results Table 1~2. First, set contractual completeness, safeguarding clauses, extra incentives mechanisms assumed these would positively result that, unexpectedly, completeness clauses have positive trust, however, do significant impact. Results hypothesis test 구분 Path st. estimate S.E. C.R. p △χ2 Result H1 (1) → (4) .359 .068 5.306 .000 - Supported (5) .429 .071 6.042 H2 (2) .226 .077 2.928 .003 2.407 Partially supported .339 .080 4.229 H3 (3) .062 .059 1.052 .293 .016 Not .069 .060 1.152 .249 H4 (6) .373 .101 3.706 (7) -.214 .175 -1.222 .222 H5 .525 .093 5.634 .294 .156 1.890 H6a (8) -.16 .082 -1.946 .052 H6b .314 .079 3.996 H7 (9) .618 .067 9.174 28.928 .102 .055 1.855 .064 * One-Tailed test. Model fit: χ2=892.215, df=536, χ2/df=1.665, RMR=.056, IFI=.943, TLI=.936, CFI=.942, RMSEA=.057. incentives, trust-credibility, trust-benevolence, affective commitment, calculative behavior, continuity. 2 Low group High t H8 .032 -.259 -2.66 5.024 .147 .399 3.874 3.073 .558 5.703 .662 6.285 1.121 .755 .107 1.277 .029 χ2=1,699.827, df=1,072, χ2/df=1.586, RMR=.068, IFI=.900, TLI=.887, CFI=.898, RMSEA=.054. Secondly, was presumed multidimensional trust-credibility benevolence, commitment-affect commitment-toward respect benevolence both commitments. On other hand, turned be although credibility negatively commitment. Thirdly, terms commitments outcome variables, confirmed author’s reduces increases behavior. In particular, stronger impact than Lastly, moderating less groups high negative. That means enlarges reducing Conclusions: implications follows. First all, unlike existing researches, mostly focus governance, investigates industry. came up type can utilized management. verified depending target variable, differs degree direction. proved strong extent bigger upon illustrates role preventive measures against