[Abstract]
Local franchise industry that was active had great influence upon national economy. This study investigated efficiency of each franchise business to strengthen competitiveness of franchise companies by using DEA model. Not only CCR but also BCC of DEA model was used to investigate eight kinds of businesses of 2,298 franchisers. for instance, fast food (27), liquor (25), outeating (252), bakery and confectionery (18), miscellaneous wholesale and retail business (40), educational service (84), barber shop and beauty salon (23) and other services (28), and to examine efficiency of scale, CRS, DRS, IRS brand and frequency of external benchmarking reference by using the most efficient franchise business brand, CCR model and BCC model. Not only EnPAS 1.0 but also SPSS 18.0 program was used: And, not only three input factors such as number of employees, number of stores and advertising expenses but also two output factors such as sales and net profit during the term were used.
The findings were: First, fast food (4), liquor (7), outeating (9), bakery and confectionery (7), educational services (7), barber shop and beauty salon (7) and other services (5) were found to do business efficiently. Second, CCR model's total technical effect, BBC model's pure technical efficiency and scale efficiency were found to be ineffective not by scale but by technical reason. Third, the scale efficiency of both CCR model and BCC model was not efficient at total technical effect, pure technical efficiency and scale efficiency to be likely to increase profit as much as inefficiency was improved. Fourth, franchisers with DRS could improve operational efficiency: The franchisers should lessen input factors considering much smaller output increase, and the ones with IRS should increase output to elevate CCR and to improve inefficiency of the scale. Organizations with ineffective combination between input and output should follow bench marking of fast food (7), liquor (8), miscellaneous outeating (14), bakery and confectionery (3), wholesale business and retail business (11), educational services (14), barber shop and beauty salons (9) and other services (10).
This study investigated relative efficiency of local franchise companies to give ineffective input factors by scale and technology. The study found out the most effectively operating franchise companies to investigate the ones having low profit.