IMPLEMENTATION OF BUSINESS TRAINING AND BRAND MANAGEMENT IN IMPROVING THE QUALITY OF BUSINESS RELATIONSHIP ON LOCAL FRANCHISE IN SURABAYA Yessy

Artanti Lecturer of Department of Management, Faculty of Economic, Universitas Negeri Surabaya E-mail: yessy.artanti@gmail.com Dr. Sri Setyo Iriani, M.Si Lecturer of Department of Management, Faculty of Economic, Universitas Negeri Surabaya E-mail: srisetyo2009@gmail.com

Abstract The current economic leads franchise system to grow. Large firms tend to choose the franchise system as compared to open new branches. The growth of the franchise industry in Indonesia is increasing. This is driven by an entrepreneurial spirit and creativity of the community to build economic independence. The number of foreign franchise in Indonesia far more than the local franchise. But ironically, half of Indonesia local franchise business conditions are still not satisfactory, while foreign franchises generally still running good. The success rate of franchises in the country (local) is still by 48%, this is due to too rapid a local franchise business offers to consumers without first strengthening themselves with the system and good management. Based on this phenomenon, this study examines the implementation of business training and brand management in improving the quality of business relationship on local franchise in Surabaya. This study population is a franchise company in Surabaya either already listed in the AFI (Association of Indonesian Franchise) or not. The criteria selected respondents are domestic franchise companies (local) in the field of food and beverages service is included in the AFI and added a local franchise company who did not participate in the AFI in small and medium scale with sampling based on the response rate. Sampling technique using purposive sampling and regression analysis is used as analysis technique. The results showed that application of business training and brand management significantly have positive influence and can improve the quality of business relationships on local franchise in Surabaya, and both variables are able to contribute by 69.7%. This study also showed that business training contributes greater than brand management. The business training done by the franchisor to the franchisee was in Surabaya showed a very significant impact. The franchisee is very minimal business experience was very helpful with good business training from the start of the business and to run a business. Training requirements, the form of training, and training of the franchisees considered very helpful. Special to equip franchisees franchisor statement with knowledge of the product, get a degree at a very high response. Key words: Business training, brand management, the quality of business relationship, local franchise

RESEARCH BACKGROUND Most of economic currency at this moment tends to be in the system of franchise. Big companies tend to choose franchise systems rather than to open new branches. The franchise industry growth in Indonesia has increased. This is driven by the spirit of entrepreneurship and societys creativity to build their economic independency. According to Association of Indonesian Franchise (AFI) data, there were 1010 franchise companies consisting of foreign and local franchise in Indonesia till 2010. Ironically, half of Indonesian local franchise businesses have unsatisfied conditions while the foreign franchise basically can run well. There are 50% local franchises that are not professional (Franchise magazine, 2007). Although the companies are still losing money, most of them dare to build franchise business. This condition is related to businessmans mindset which wants to protect its own business. Consequently, franchisee is often harmed and is not able to reach sales target from the franchise business which they run. The success level for local franchise is still 48%. This is because local franchise offers its business to costumers too fast without previously strengthening itself with excellent system and management. A lot of local franchisors have not produced steady and capable business concepts. Moreover, the government supervision has not been done as it should be (Franchise magazine, 2007). Thus, among wide spread of franchising in this country, investors should remain cautious to use the money in the business so that special trainings need to be done before starting the franchise business. According to explanation above, it is obvious that the failure in managing franchise system often happens so that the contract arrangement has to be arranged in such a way. According to Amir Karamoy (2005) there are a lot of things that need to be considered by franchise businessman, but there are two important things which must be emphasized; those are relationship management or franchise relationship management and marketing franchise. From that consideration, it is important to determine factors that establish the success in organizing especially in franchise system. Therefore, various forms of education dealing with trainings offered by franchisor can be a motivation for someone before investing the capital in a franchise business by considering franchise agreement. Usually, product environment and business type influence the quantity and training type needed by franchisee. In most cases, trainings give important benefits for franchising. (Longenecker, 2001:63).

Franchising is built on brand concept first and the effectiveness of customers demand. By using correct tool and franchise support, franchisee can be a mean to promote a brand. Keller (1992: 35-50) suggested brand management process can be done by maintaining brand consistency, keeping brand equity, strengthening brand and arranging brand. Brand management can be a valuable asset for a company and focus on brand equity management is important for franchise organization (Pitt, Napoli, 2003:411). Finally, it can be concluded that the success of franchise business is started from the brand management. Brand becomes one of support the success of franchise business since it is related to the franchise reputation. Brand cannot be established in a day on paper, its strength has to be tested, and has to be speaking topic so that people are aware, realize the brand (Pramono, 2007:24). The success of a businessman in business depends on his ability to make decision especially in brand management. Problem Formulation Based on the above background, this research issue is whether there is influence of implementation business training and brand management on improving the quality of business relationship on local franchise in Surabaya either partially or simultaneously? Research Objectives Based on the issues that have been described above objectives of this study was to test empirically and analyzed the influence of implementation business training and brand management in improving the quality of business relationship on local franchise in Surabaya either partially or simultaneously. LITERATURE REVIEW 1. Franchise Franchise in business is the granting of a license attempted by one party (individual or company) to another party as a recipient of the franchise. In other words, franchise is business arrangement with the system of granting the right to use trade mark from the franchisor to independent party or franchisee to sell products or services in accordance with agreement standardization to open business by using trade mark or brand under their license for all business system. The party that gives franchise is called franchisor and the party that receives is called franchisee. 2. Business Training

In most cases, trainings give important benefits for franchising, as long as the trainings allow individuals who have little education and training to start and succeed in their own business. (Longenecker, 2001: 63). Generally, training is defined as a process of collecting and analyzing data in order to identify which sections or factors in a company that needs to increase or improve so that employees work and company productivity increases. The purpose of this activity is to obtain accurate data whether there is necessity to set training or not (Papu, 2002). Every element of labor (employee) is expected in doing their work to be successful and productive. Thus, franchisee party is demanded for balance ability and therefore franchisee has to work well, learn continuously and join training designed for the related party. In this kind of relation, it is necessary to design a continuous, gradual and rotating as well as integrated and properly coordinated. The aspects needed in franchise business training are: a. In joining the training, there are some prerequisites that have to be fulfilled by franchisee: 1) fund prerequisite, 2) time, 3) means and infrastructures, 4) the environment of business place, 5) labor motivation and 6) agreement. b. The facilities given by franchisor to franchisee are different based on the types of products. The facilities which are commonly given are 1) the supply of building means, tools, sign or trade mark, 2) regular labor training. c. The training forms given by franchisor to franchisee in franchise business are basically similar, which are giving materials, field executing and discharging. The training forms are human recourse training, production training, financial training (managerial) and marketing training. In this research, researcher uses rules and regulation, facilities and forms of trainings as measurement indicators for business training. 3. Brand Management Brand management process in franchise has some challenges which are responsibility to develop and manage the success of a brand. This task depends on parties, franchisor and franchisee, where all parties has mutual relationship in controlling the process of brand management. According to Pitt (2003) there are nine dimensions that can be used to measure brand performance in order to build a brand construction prepared for the managers: a. Keeping the brand in good condition to deliver the benefits in accordance with customers demands. b. Still relevant brand.

c. Proper brand position. d. Brand is still consistent. e. The leadership level of brand is appropriate. f. Brand is able to give full power in marketing activities. g. Manager understands brand as a meaningful power for customers. h. Brand gives constant support. i. Company monitor founds brand equity. According to Greenbaum (2006) franchising is built on a brand concept first and customers demand effectiveness. Creating a national brand takes a long time for a franchise brand. To build effective-world-class franchise brand, there are some main jobs, which are: a. Creating unique character for a brand b. Building relationship with market target c. Creating visual impact through high-quality logo and brand identity Monroy and Alzola (2005: 585) also states that brand management also gives profit for franchisor and franchisee. For franchisor, it guarantees the development of brand image by making its brand more popular and as a controller for its distribution channel. While for franchisee, it is an opportunity, an access, to contribute in a business concept of a famous brand so that it will cause the increase of relationship quality between franchisor and franchisee if the brand management is higher. In this research, there are 4 dimensions used to measure brand performance toward franchisee which are to keep brand in superior condition, brand consistency, brand has power in marketing and brand gives continuous support.

Brand Management

Keeping brand in its superior condition

Brand consistency

Brand creates power in marketing

Brand gives continuous support

Figure 1, Dimensions of Brand Management Source: Pitt, Napoli, (2003: 413), Keller (1992: 35-50) Staelin, (1994: 159-172) Hulbert (1999:53-56) 4. The Quality of Business Relationship

The relationship between franchisor while influencing franchisee often triggers a conflict. From Tikoos research result (2005:329), franchisor whose roles include demand, threat and agreement possesses positive bond to relationship conflict with franchisee. The conflict itself is usually rooted by asymmetry distribution on franchisors power (Quinn and Doherty, 2000: 354). Conflict aspect must be managed to create smooth relationship between franchisor and franchisee. Since the relationship in franchise cannot be entirely controlled by franchisees dependence, franchisors roles above have negative relationship toward the franchisees dependence. It means franchisees commitment cannot be done with the pressure from the franchisor. Hence, the best solution is creating fair relationship to both directions between franchisor and franchisee (Tikoo, 2005: 329). According to Johnsin (1999: 4-18), relationship quality is described as the depth and the atmosphere of organization of inter-company relationship. There is also a statement that relationship quality is a detailed evaluation of the relationship strength (Smit, 1998; Garbarino and Johnson, 1999). In the franchise world, there are some studies stating that variables which are able to depict relationship quality in franchise network, are; trust, commitment, conflict, familial and collaboration. (Dant and Schul, 1992; Cox, 1995; Dahlstrom and Nygaard, 1995; Mehta, 1999; Bordonaba Juste and Polo Redondo, 2002, Garca Rodrguez et al., 2004 in Monroy and Alzola, 2005: 585). Consequently, it is important to measure relationship quality between franchisor and franchisee to settle relationship strength and to clarify that it does not only happen in network but also in sales performance. Monroy and Alzola (2005: 585) states clearly dimensions that can be used to clarify business relationship quality in franchise business. Those dimensions include: a.Trust Trust is the most important thing to determine the collaboration success (Dwyer et al., 1987; Ganesan, 1994; Mohr and Spekman, 1994; Morgan and Hunt, 1994; Gundlach et al., 1995; Varadarajan and Cunningham, 1995; Jap, 1999 dalam Monroy dan Alzola, 2005: 585). Besides, trust can be described into two different components which are credibility and benevolence (good deeds) (Monroy and Alzola, 2005: 585). b. Credibility Credibility refers to expansion where 1 partner trusts that another partner has capability to perform effective and reliable work while benevolence is based on expansion where a partner trusts another partner because of having beneficial motivation to overcome existing problems. c.Commitment

Some researchers state that commitment is an essential element in relationship success (Dwyer etaL, 1987; Ganesan, 1994; Mohr and Spekman, 1994; Morgan and Hunt, 1994; Gundlach et al., 1995; Varadarajan and Cunningham, 1995; Andaleeb, 1996; Geyskens etaL, 1996; Jap, 1999 dalam Monroy dan Alzola, 2005: 585). Commitment is important as a collaboration result which is able to reduce attraction potential to another alternative and eventually is able to increase profit. Geyskens (1996 dalam Monroy dan Alzola, 2005: 585) states that the difference between affective commitment and calculative commitment is the most important in relationship among organizations. Generally, affective commitment is related with the demand to continue relationship due to ahead positive relationship in identifying its partner. Partner who has affective commitment continues relationship because s/he likes another partner, enjoyment and loyalty as well as sense of belonging. In the contrary, calculative commitment is a commitment based on partners expansion that accepts the need to maintain relationship referring to abandoned cost transfer; which generates the calculation between cost and benefit including investment settlement made in a relationship. d. Relationalism (Familial sense) Relationalism can be called as social collaboration considering references from partners behavior evaluation. In fact, they allow consideration on the security of anothers behavior with certain standard in completing basic composition to solve a conflict. In this research, things that belong to relationalism are flexibility, solidarity, mutuality and conflict harmonization. The Quality of Franchise Relationship

Trust

Affective Commitment

Familial

Calculative Commitment

Figure 2. Dimensions of The Quality of Business Relationship Source : (Ganesan, 1994; Mayer et al, 1995; Andaleeb, 1996; Doney and Cannon, 1997; Das and Teng, 1998; Siguaw et al, 1998; Baker et al., 1999; Gilliland and Belle, 2002; Vzquez Casielles et al. 2002 dalam Monroy and Alzola, 2005: 585). HYPOTHESES

Based on the explanations in theoretical background as well as emerging and supportive phenomena, the researcher can formulate hypotheses as follow: H1 H2 : It is assumed that business training influences positively and significantly in : It is assumed that brand management influences positively and significantly increasing the quality of local franchise business relationship in Surabaya. in increasing the quality of local franchise business relationship in Surabaya. Independent Variable (X1) Business Training Rules and regulation Facilities Training forms

Dependent Variable (Y)

Relationship Quality Trust Affective commitment Calculative Commitment Familial Management

Independent Variable (X2) Brand Management Best brand in delivering profit in accordance with customers wish Still Relevant brand Brand has complete power in marketing activities Brand gives continuous support

Figure 3. Theoretical Framework RESEARCH METHODS Determination of Population and Sample The research population is franchise companies in Surabaya whether or not they have already been listed in AFI by sampling technique, non-probability sampling. Sample interpretation technique used in this research is purposive sampling. The criteria for choosing the respondents are domestic (local) franchise companies in the section of food and beverages service listed in AFI and added with local franchise companies that have not been listed in Association of Indonesian Franchise in small and medium scales. From some local food and beverages franchise business in small and medium class in Surabaya, the researcher distributed questionnaires directly to their own franchisee. The quantity of local franchise working in the food and beverages section in small and medium business scale is plenty so that it was decided by respond rate. Respond rate in this research is determined; respond rate is 30%from the number of questionnaires distributed by the researcher with the assumption that the total amount has to be more than 30 respondents as a pre-requirement of minimum number of

sample for regression analysis while the analysis technique used is doubled regression. Operational Definition and Measurement of Variables Business Training (X1) Business training is a process of collecting and analyzing data in order to identify which sections or factors that need to increase or improve so that employees work and company productivity can be increased. The purpose of this activity is to obtain accurate data whether it is necessary to conduct training (Papu, 2002). The dimensions and indicators used in this variable consist of: a. Rules and regulation needed by franchisee in order to join the training of franchise business are seen from: prerequisite of fund (X1.1.1), time (X1.1.2), means and infrastructures (X1.1.3), the environment of business site (X1.1.4), labor motivation (X1.1.5), agreement (X1.1.6). b. Facilities given by franchisor to franchisee in order to join the training of franchise business are seen from: equipping building means, tools, mark or trade mark (X.1.2.1), regular work establishment (X.1.2.2). c. The form of training given by franchisor to the franchisee in franchise business is seen: supplying knowledge about the products (X.1.3.1), supplying raw materials (X1.3.2), and operating managerial system (X1.3.3). Brand Management (X2) Brand management is the development and management of a strong brand. The indicators used in this variable consist of: a. Best brand in delivering profit in accordance with customers wish (X2.1) b. Still Relevant Brand (X2.2) c. Brand has complete power in marketing activities (X2.3) d. Brand gives continuous support (X2.4) The Quality of Business Relationship (Y) The quality of franchise business is a degree where franchisee is connected to franchisor. The indicators used in this variable consist of: a. Trust (Y1.1) b. Affective commitment (Y1.2) c. Calculative commitment (Y1.3) d. Familial (Y1.4) Determination of Population and Sample The research population is franchise companies in Surabaya whether or not they have already been listed in AFI by sampling technique, non-probability sampling. Sample interpretation technique used in this research is purposive sampling. The criteria for

choosing the respondents are domestic (local) franchise companies in the section of food and beverages service listed in AFI and added with local franchise companies that have not been listed in Association of Indonesian Franchise in small and medium scales. From some local food and beverages franchise business in small and medium class in Surabaya, the researcher distributed questionnaires directly to their own franchisee. The quantity of local franchise working in the food and beverages section in small and medium business scale is plenty so that it was decided by respond rate. Respond rate in this research is determined; respond rate is 30%from the number of questionnaires distributed by the researcher with the assumption that the total amount has to be more than 30 respondents as a pre-requirement of minimum number of sample for regression analysis while the analysis technique used is doubled regression. Data Types and Data Sources Type of data used in this study is the primary data through the respondents, is people who were subjected to experiments by distributing questionnaires to the local franchisee in Surabaya. Analysis Method Testing tools that are used in this study is multiple regression analysis. For the multiple regression model was formulated as follows: Y = a + bX1 + b2X2+ e .......................... Where: Y a : The Quality of Business Relationship : The value of intercept (constant)

b1- b3 : The regression coefficient X1 : Business training X2 : Brand Management e : error

RESULT AND DISCUSSION Results Demographic Characteristics of Respondents Respondents characteristics description based on how long they run their business in accordance with the questionnaires result distributed by the researcher. Table 1 Respondents Characteristics

Respondents Characteristics Less than 1 year 1 Year Business 2 Years 3 Years Period 4 Years 5 Years Total Source: Data Primer Validity and Reliability Test Results Data

Quantity 3 11 25 11 2 3 55

Persentage (%) 5,5 20 45,5 20 3,6 5,5 100

Validity of test results for each note that all of the indicators used to measure all the variables have a correlation coefficient greater than r-table for n = 55 is 0.266 so that all the indicators of these variables are valid (Imam Ghozali, 2005). Internal consistency of the items related questions to the variables in this study are indicated by Cronbach's alpha coefficient greater than 0.6. This suggests that whole grains have a question from each of the variables declared reliable (Imam Ghozali, 2005). Classical Test Assumptions Data Normality Test Testing normality of data is done using the Kolmogorov test - where the value of Kolmogorov Smirnov - Smirnov of 0.819 and not significant at 0.05 or above were 0.05 (p = 0.513 for> than 0.05). So we can not reject H0, which means that the residuals are normally distributed. Test for Multicollinearity Test results multicollinearity data show that all independent variables had tolerance values above 0.10 and VIF values were under 10. This suggests that the regression model is free of multicollinearity problems. Test for Heteroscedasticity Heteroscedasticity test results obtained with the scatter plot that there are points that spread the field scatter. This means that the model of regression in this model does not contain a problem of heteroscedasticity. Multiple Linier Regression Analysis Analysis result from double regression by using SPSS 11.5 in this result can be shown in the following table: Table 2 The Calculation Result of Double Regression SPSS Variables X1 Regression Coefficient 0,672 5,969 tarithmetic Sig 0,000 Constantan Farithmetic = -0,542 = 63.100

Fsig X2 0,431 4,553 0,000 R2 Adjusted R2 N

= 0,000 = 0,708 = 0,697 = 55

From table 2 above, it can be concluded moderation regression equation as follow: Y = -0,542 + 0,672X1 + 0,431X2 + e Based on the equation above, it can be concluded that the value of Y will increase or decrease if there is one unit change in the value of X1 or X2. Hypothesis Testing and Discussion Hypothesis testing is done using simple linear regression analysis. Results of testing the overall model F test obtained with the F value of 63.100 with a significance of 0.000. Thus, testing a model using the variables of business training and brand management can be demonstrated as significant to the quality of business relationship. Magnitude of the influence of the two independent variables are indicated with an adjusted coefficient of determination R 2 value of 69.7% percent of the quality of business relationship can be explained by the variables business training and brand management and the remaining 30.3% of the quality of business relationship explained by other variables in outside the model. Furthermore, to determine the effect of the partial of each independent variable obtained by the test results as follows: Table 3 t Test Result Variable Business training (X1) Brand Management (X2) Tarithmetic 5,969 4,553 Probabilities of significance 0,000 0,000

Based on table 3 above, we can conclude that the value of tarithmetic from each variable, business training and brand management, when it is compared to t table amount 1,674 then the result is tarithmetic becomes bigger than ttable. It means that business training and brand management variables have an impact toward the quality of business relationship. When it is seen from the value of tarithmetic on each variable, it is obvious that business training has bigger tarithmetic value so that it can be concluded that business training has stronger impact to the quality of business relationship. Besides looking it from the value of tarithmetic, when it is seen from the significance value, doubled regression equation model above is also significant because its significance value is below 0,05 ().

Discussion 1. The effect of implementation of training business in improving the quality of business relationship on local franchise in Surabaya Every business, for sure, gives training to its employee, especially to increase its production quality and services as well as various franchise business in Surabaya. Training taken from franchisor is valuable since it can help to reduce weaknesses in managerial skills which are typical in most small businessmen. Training done by franchisor is often started a few days or weeks in a training school or other settled locations. Beginning training program not only includes operating procedure used by franchisee but also more extensive topics, such as, note saving, supply control, insurance and interpersonal relationships. The research result shows that there is significant influence between business training and the quality of franchise business relationship in Surabaya. This result was also supported by Marliana (2009) who researched about training contribution toward the success of franchise business in Semarang. Business training done by franchisor for its franchisee that is in Surabaya shows a significant matter. Even the application of business training seems to have bigger influence than brand management. The franchisee who has minimum business experience feels very helpful with the existence of business training from the beginning of the business until during running the business. Training rules and regulations, training forms and training forms are very helpful for franchisee, especially for the statement that franchisor supplies franchisee with product knowledge, gets very high respond level. In fact, training is an absolute prerequisite that must be given to employees in every business that is carried out by those employees. There are a few training methods done in franchise training which are expositive communication model, discovery communication model, small-group communication model, programmed learning and training in industry. Some training which was observed from the franchise place can be concluded that every franchise has different forms of trainings, such as: (1) franchisor has prepared special place as a training site for creating products together with all tools and facilities needed during training from the beginning to finishing, with training period is for several weeks. (2) For franchise in small scale, franchisor surveys the location and when it is suitable, the franchisor will come to franchisee to give training in that place. This form of training is relatively shorter compared to franchisor in bigger business scale.

The product environment and business type influence the number and types of trainings needed by franchisee. In most cases, training gives important profit for franchising system provided that the training allows individuals who have little education and training to start and succeed in their own business. 2. The effect of implementation brand management in improving the quality of business relationship on local franchise in Surabaya Brand management process in franchise possesses challenges which are responsibilities to develop and manage brand success depending on both franchisor and franchisee; all parties have profitable dependence in controlling brand management process (Pitt, Napoli, 2003: 411). The research result shows that there is significant influence between brand management toward the quality of franchise business relationship, hence it can be concluded higher brand management will increase relationship quality. This result support the argument of Pitt and Napoli (2003: 411), which in brand management there is dependence between franchisor and franchisee. Greenbaum (2006) also states that the development of standard brand is an essential process for every national franchise company in seeking brand awareness power and building brand equity. Monroy and Alzola (2005: 585) also states that brand management has benefit for franchisor as well as franchisee. For franchisor, the benefit that can be obtained is able to guarantee the development of its product brand image by getting more popular. For franchisee, it is an opportunity to contribute in business concept of a famous brand. This research result also supports the research result done by Hapsari (2006) by using franchise business objects in the region of Center Java and Yogyakarta, found that brand management influenced positively toward the franchisee relationship quality. The importance of brand management is supported by some experts, that is Greenbaum (2006) who states that franchising is built on brand concept first and customers demand effectiveness. It takes a long time for a franchise brand to become a national brand. To build a world-class franchise brand, there are some main tasks in building effective brand; (1) creating unique character for the brand, (2) building relationship with market target, and (3) creating visual impact through high-quality logo and brand identity. In

marketing principle, brand must be remembered consistently. With appropriate tools and franchise support, franchisee can be a mean in promoting the brand. Brand management done by franchisor to the outlets in Surabaya also shows significant thing although the significance level is smaller than business training. Statement item about brand that is relevant with customers demand will have higher brand image in brand consistency dimension means that franchisee feels that product brand will have higher brand image when it is related closely with customers demand at that time. Overall, brand management process in franchise has challenges, that is, responsibilities to develop and manage brand success depend on both franchisor and franchisee, and all sides are profitably dependent toward each other in controlling brand management franchisor process. Brand For management franchisor, has it benefits for the and franchisee. guarantees

development of brand image by getting its brand in distribution channel. For franchisee, it is an access opportunity to contribute in business concept so that the higher the brand management is, it will increase the relationship quality between franchisor and franchisee. In franchise business, brand is a main reason to run franchise business. CONCLUSION AND SUGGESTIONS Conclusion Contributions donated from variables, business training and brand management, to the relationship quality of local franchise business in Surabaya is relatively average, which is around 69, 7%. It indicates that it is possible that there are other variables out of the research motivation variables The variable which and are actually suggests able that to in give bigger contribution. researcher entrepreneurship influencing

conflict

management

relationship quality should be considered to further research. In franchise business, to increase the quality of its business relationship, it is necessary to pay attention to brand management, since in this research that variable gives smaller contribution than

business training. In franchise business, brand is the main reason to run franchise business since brand is a long-lasting investment and an abstract active that holds high equity so that brand management needs to be taken care through: best brand in delivering benefits in accordance with customers demand, brand is still relevant, and brand creates full power in marketing activities, brand also gives continuous support. Franchisee should be supplied with adequate knowledge about brand management from the products they sell so that there wont be any prejudice that brand management is entirely franchisors responsibility. The perpetuity of a brand especially in franchise business is mutual responsibility between franchisor and franchisee. Limitations of Research 1. When many 2. distributing franchisees the who questionnaires can fill out found and that return many the franchisees, especially owners are on out of Surabaya, so not questionnaire. Measurement instrument variable of this study all use the instruments adopted from previous researchers. So the possibility of a weakness in translating the instrument that caused the changes in meaning and possible wrong in perceiving the intentions of researchers who actually want to achieve.