The Effects of TSI(Transaction Specific Investment) on Dependence, Trust, Commi tment and Re-Contract Intention in Korean Food Franchising

Purpose - The objective of this paper is to testify the effects of Korean food service franchisor and franchisee's TSI(Transaction Specific Investment) on dependence and trust of franchisee toward franchisor and re-contract intention. The study examines the effects of both franchisor and franchisee's TSI on dependence, trust on franchisor compared with Ganesan's study(1994). Research design, data, methodology - Data were collected from 495 Korean food service franchisees and analyzed with structure equation modeling using path analysis by SPSS 18.0 and AMOS 18.0. Results - 1) The franchisor's TSI has positive effect both on franchisee's dependence and trust toward franchisor. 2) The franchisee's TSI has positive effect on franchisee's depen dence toward franchisor, but has negative effect on franchisee's trust toward franchisor. 3) The franchisee's dependence and trust have positive effects on commitment. 4) The franchisee's commitment has positive effect on re-contract intention. Conclusions - The findings of this study show that both franchisor and franchisee's TSI effect franchisee's dependence and trust to ward franchisor and franchisee's dependence and trust toward franchisor have impact on commitment and re-contract intention in franchisee's perspective. It gives managerial implications to franchisor who are striving to keep or raise franchisee's re-contract intention.