Franchise Business and Global Management Strategies
Authors:   Asia-Europe Perspective Association, Kim Man-Hwan , Cho Joong-Hwan , Sul Bong-Sik 
Published: June 2018

Franchise business is a corporate management system through which a business entity offers(franchisors) its franchisees good corporate image, name and trademark, and various management know-hows to mutually achieve better business achievements. The original meaning of the term ‘franchise’ is “giving freedom” or “freeing one from slavery.” Franchise system is considered one of the best modernized distribution systems. However, Korean economy does not nurture franchise businesses actively. Franchise businesses have been inhibited by personal businesses without ample opportunities to grow. The existing franchisors have gathered franchisees, lacking capitals, technologies, management know-how, and advertising strategies and bringing bad influence to the society.
It must be remembered that unprepared franchises in global business never succeeds. Doing businesses in the global market may be confronted by keener competition and stricter restrictions and legislations compared to domestic market. Ethical management is essential and success is limited to those who are not well-prepared without innovative tactics.
In the future, super-sized franchises with economy of scale, e-business or low cost-high efficiency know-how and strategies, and sustainable ethical management are expected to increase. Therefore, it is necessary for Korea’s franchisors to increase investment in various areas of business besides restaurant or commodity retail and focus on exploring new markets through global management.
As information can be shared relatively openly in cyber space, it would be easier to enter the global market through online information service that goes beyond national borders and forms an invisible distribution channel through out the continents. The invisible distribution channel is continuously enlarging its commercial sphere, which is mostly infinite but is very slowly being explored. The new markets are characterized by its benefits and exceptional business successes exclusive to frontiers. In this respect, this type of new markets is the new path which Korea’s franchisors must pursue in the age of global management.
Currently, many franchisors in Korea are engaging in this type of global management. To name a few, there are Genesis BBQ, Colon I-Net, and Nonghyup Moguchon. These companies are deploying various strategies in opening stores abroad and solving various inevitable problems to take step-by-step approaches to the global market. I hope that their trials and errors, and many successful strategies can develop into special know-hows that open a way to the 2nd McDonald’s to many other local franchisors that are planning on global management.
Korean economy has achieved both quantitative growth and qualitative development, ranging from product exports to capital investment and global manufacture. The start of new-generation growth should be the globalization of distribution and service industries. Considering that about 20% of Korean population currently dwell abroad, franchisor should no longer leave global management as the alternative measure of economic growth.
Thus, this study discusses the current situations of Korea’s franchisors in Chapter 2, their global managements and the significance of their activities in Chapter 3, success cases of global franchisors in Chapter 4, and proposes possible strategies for franchisors to deploy for their global management plans in Chapter 5.