The Impact of Food Service Franchisee s Customer-oriented Activities on Hedonic, and Utilitarian Values and Loyalty

Purpose – As the competition in the foodservice franchise industry and the market becomes fierce and the entry barrier is lowered, the foodservice franchisor and franchisees strive to increase their competitive advantage in the market. Therefore, the franchisor and franchisees use experience management strategies to enhance the positive experiences of customers visiting the stores. In this regard, this study examines the effects of customer-oriented activities (physical-, social-, health-, and service-oriented activities) on utilitarian and hedonic values, and loyalty using stimulus-organism-response (S-O-R) model and value-expectancy theory. Research design, data, methodology – The data were collected from panels of online survey company, who visited a foodservice franchisee within last month. The survey was conducted for about 15 days from March 7, 2019 to March 21, 2019, and about 3,500 e-mails and messages were distributed to ask for the survey. A total 412 responded and completed the questionnaires. Of the 412 completed questionaires, 12 were discarded due to missing and misinformation data and 400 were retained for further data analysis. Results --The results showed that social oriented activities, health oriented activities, and service oriented activities had positive effects on hedonic value, while physical oriented activities did not have a significant effect on hedonic value. Health oriented activities and service oriented activities had positive effects on utilitarian value, while physical oriented activities and social oriented activities had no significant effects on utilitarian value. Hedonic and utilitarian values also have a positive effect on loyalty. Conclusions – First, food service franchises should provide services and menus in consideration of the health of customers. When a customer visits the store, franchisee should provide more health-oriented food or materials and clean and comfortable conditions so as not to threaten the health of the customer. Second, the food service franchise must build a service-oriented system. Foodservice franchisor need to provide continuous service training not only to the franchisees, but also to the employees of the franchisees. Third, franchise should design a store where customers can form social exchanges through providing various information exchange to customers and making the store as a local community center