Dorojatun Prihandono

Franchising is one of the most trustworthy strategic alliance formations to start or expand businesses. Like many other business formations, franchise businesses need sustainable and long-term running; these objectives can be reached by a proper relationship between partners – the franchisor and the franchisee – in the alliances. Both partners’ perspectives are valuable inputs to provide insight into understanding the sustainability of Indonesian franchise businesses. Furthermore, in any type of strategic alliances conflict is a risk that needs to be managed properly. This study aims to examine the relationships of determinants that influence franchise business sustainability. The determinants are risk management, trust, satisfaction, and sustainability. The study applies confirmatory factor analysis using structural equation modeling (SEM) AMOS software. Respondents in this study are franchisors and franchisees in the Indonesian retail and food and beverages (F&B) sectors, the study accommodates 204 respondents. Based on the analysis the study reveals that there is a positive relationship between risk management and satisfaction. Risk management also has a positive relationship with survivability; trust and satisfaction also have a positive relationship. Meanwhile, there is no relationship between satisfaction and survivability and the last relationship is between trust and survivability that has no positive relationship between the determinants. This study provides clearer insight to understand the relationships between determinants that influence franchise business survivability in Indonesia, especially based on both parties’ perspectives.

In the current era, the challenges faced by SMEs in Indonesia are becoming increasingly complex. Previously, the primary challenge for SMEs has been to enhance performance. However, with the emergence of information technology, SMEs are now required to compete fiercely. SMEs in Indonesia are still in the process of digital transformation to improve their business strategies, thus limiting research focused on digital transformation in SMEs. Research also considers market complexity and digital strategy as crucial factors for SMEs. The aim of this study is to analyze the role of digital transformation in influencing SME performance. The research approach is quantitative, involving 171 SMEs owners as respondents. The instrument utilized is a Likert scale questionnaire, focusing on the majority of SMEs in Indonesia, particularly those in Java, the most populous island and business center of the country. This includes SMEs operating within various sectors, such as culinary, fashion, retail, and creative industries. The results indicate that digital strategy and market complexity influence digital transformation and SMEs performance. The research findings suggest that digital transformation mediates the influence of digital strategy and market complexity on SME performance. The novelty of this study lies in its focus on the current SMEs digitalization strategy area. This study indicates that digital transformation is an essential aspect affecting current SME performance. The results suggest that SMEs require focused strategies to strengthen resources and gain competitive advantage in complex markets.