Franchisors’ Strategic Pricing Approaches for Franchise Fee Decisions and the Moderating Role of the Competitive Condition: Evidence from the Korean Franchising Market
Abstract
:1. Introduction
2. Literature Review and Hypothesis Development
2.1. Prior Research on Pricing Approaches
2.2. Cost-Based Approach and Competitive Condition
2.3. Value-Based Approach and Competitive Condition
3. Methodology
3.1. Data
3.2. Variables
3.3. Econometric Estimation
4. Results
4.1. Descriptive Statistics
4.2. Results of the Main Analysis
5. Discussions and Conclusions
5.1. Research Implications
5.2. Suggested Future Research and Limitations
Author Contributions
Funding
Institutional Review Board Statement
Informed Consent Statement
Data Availability Statement
Conflicts of Interest
References
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Variable | Mean | S.D. | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | |
---|---|---|---|---|---|---|---|---|---|---|---|---|
1 | Franchise fee a | 132,387 | 1,083,383 | 1 | ||||||||
2 | Cost level b | 0.9367 | 0.1145 | 0.332 *** | 1 | |||||||
3 | Brand equity c | 333.75 | 178.57 | 0.418 *** | 0.095 | 1 | ||||||
4 | Rivalry d | 0.2507 | 0.1387 | 0.029 | −0.078 | −0.133 | 1 | |||||
5 | Firm size e | 777.13 | 711.86 | 0.037 | −0.068 | 0.487 *** | −0.123 | 1 | ||||
6 | Franchising experience f | 22.76 | 38.32 | 0.199 ** | 0.122 | 0.157 * | −0.277 *** | 0.217 ** | 1 | |||
7 | Contract period g | 2.92 | 1.06 | 0.585 *** | 0.309 *** | 0.289 *** | −0.016 | −0.067 | 0.074 | 1 | ||
8 | Franchising engagement h | 0.9292 | 0.1508 | −0.586 *** | −0.257 ** | −0.106 | 0.058 | 0.239 ** | −0.000 | −0.513 *** | 1 | |
9 | Franchisee performance i | 290,858 | 195,736 | 0.628 *** | 0.123 | 0.515 *** | −0.238 ** | 0.234 ** | 0.098 | 0.397 *** | −0.503 *** | 1 |
Model 1 | Model 2 | Model 3 | |
---|---|---|---|
Cost level b | 0.5730 ** [0.2187] | 0.7092 [0.6655] | 0.5432 * [0.2138] |
Brand equity c | 0.2476 *** [0.0660] | 0.2465 *** [0.0066] | 0.5542 *** [0.1342] |
Rivalry d | 0.0412 [0.0457] | 0.0480 [0.0551] | −1.0474 * [0.4200] |
Cost level b × Rivalry d | 0.0987 [0.4557] | ||
Brand equity c × Rivalry d | 0.1869 ** [0.0717] | ||
Firm size e | −0.00008 [0.00005] | −0.00007 [0.00005] | −0.00008 [0.00005] |
Franchising experience f | 0.0013 [0.0007] | 0.0014 [0.0008] | 0.0015 * [0.0007] |
Contract period g | 0.1474 *** [0.0310] | 0.1478 *** [0.1478] | 0.1422 *** [0.0303] |
Franchising engagement h | −0.8536 *** [0.2449] | −0.8607 *** [0.2471] | −0.8440 *** [0.2391] |
Franchisee performance i | 0.0014 *** [0.0002] | 0.0014 *** [0.0002] | 0.0014 *** [0.0002] |
Chi-squared | 320.36 *** | 320.50 *** | 341.96 *** |
Number of observations | 150 | 150 | 150 |
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Sun, K.-A.; Moon, J. Franchisors’ Strategic Pricing Approaches for Franchise Fee Decisions and the Moderating Role of the Competitive Condition: Evidence from the Korean Franchising Market. Adm. Sci. 2023, 13, 194. https://doi.org/10.3390/admsci13090194
Sun K-A, Moon J. Franchisors’ Strategic Pricing Approaches for Franchise Fee Decisions and the Moderating Role of the Competitive Condition: Evidence from the Korean Franchising Market. Administrative Sciences. 2023; 13(9):194. https://doi.org/10.3390/admsci13090194
Chicago/Turabian StyleSun, Kyung-A, and Joonho Moon. 2023. "Franchisors’ Strategic Pricing Approaches for Franchise Fee Decisions and the Moderating Role of the Competitive Condition: Evidence from the Korean Franchising Market" Administrative Sciences 13, no. 9: 194. https://doi.org/10.3390/admsci13090194