Relational bonding strategies in the franchise industry: the moderating role of duration of the relationship

Abstract

Purpose – This paper aims to examine the effect of different relational bonding strategies on franchisees’ perceptions of benefits. The duration of the relationship is framed as a moderator between three types of relational bonds and the perceived benefits. Design/methodology/approach – The data are collected via a survey from foodservice franchisees in South Korea. To test the study’s hypotheses, the research model was estimated with two-stage least squares. Findings – The result shows that social and structural bonds have a significant impact on franchisees’ perceptions of benefits. There are some significant interactions between different types of relational bonds and the duration of the relationship. Perceptions of benefits are found to influence satisfaction, intentions to recommend, intentions to renew the contract and long-term orientation. Practical implications – The study suggests that franchisors may want to focus on developing and strengthening social bonds, and also customize their relational approaches based on the duration of the relationship with the franchisees. Originality/value – This research illustrates the impact of three types of relational bonding strategies on franchisees’ perceptions of the benefits and also examines the significant moderating role of the duration of the relationship.

Relationship of Ethical Leadership, Corporate Social Responsibility and Organizational Performance

“…On the other hand, franchisors can also reach rapid market growth and profitability using franchisees' capital and labor force [26]. The relationship between a franchisor and franchisee relies heavily on a franchise contract or agreement of two parties so that both should act in the brand's interest [13,27]. The inter-dependent relationship under the franchise contract mutually benefits two parties (i.e., franchisor and franchisee) to be successful, as well as consider whether CSR activities can enhance performance [27].…”

“…To operate a franchise business, the franchisees are in exchange for a fee under permission of the franchisor's reputation, trademarks, name, and guidance such as techniques and procedures [13]. Franchising businesses are beneficial in the sense that franchisees can easily initiate their business with a small investment along with operational and technical skills learned by franchisors.…”

“…Within the context of a franchise system, senior management plays a more significant role to encourage its franchisor and franchisees to initiate CSR practices than other industries [12], as they are required to comply with the established rules and standards by the franchise contract [13]. In essence, senior management's operating philosophy motivates its franchise business to fulfill social goals and objectives, and advocates business engagement with a socially-oriented perspective [14].…”

Resale pricing as part of franchisor know-how

“…Franchisor organizational know-how also depends on his/her capacity to manage relationships with franchisees in order to prevent potential conflicts or to ensure the replication of the franchise concept in all locations because in case of failure of collaboration, parties may use the acquired capabilities against the former partner who provided them (Simonin, 1997;Lee et al, 2015). Both types of know-how have to be considered in a broader context with contractual relationships and human relationships, as reflected in Figure 1.…”

Critérios Que Balizam a Escolha De Franquias

“…Ainda sobre o tema relacionamento franqueado-franqueador, Lee et al (2015) sugerem que haveria três tipos principais de vínculos relacionais: (i) os estruturais, (ii) os sociais e (iii) os financeiros. Nos três casos, a duração do relacionamento seria um mediador indireto.…”