Factors contributing to middle market hotel franchising in Korea: the franchisee perspective

Abstract

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.