Trust and commitment within franchise systems: an Australian and New Zealand perspective

Abstract

PurposeAlthough research in franchising is currently experiencing an advancement in the investigation of behavioural attributes, the motivators and perceptions of participants within this partnership, the key variables of trust and commitment, a key to successful business relations, requires further insight. The purpose of this paper is to extend the idiosyncratic dynamics of the franchisor‐franchisee relationship and the influence of such constructs from a distance perspective. Seminal work on relationship marketing (Morgan and Hunt) forms the foundation in the development of the franchising relational dynamics model posed within this paper.Design/methodology/approachThis paper adopts a qualitative, case‐based approach of four Australian retail franchises with holdings in New Zealand. In‐depth interviews were conducted with 20 franchisees to derive perceptions on trust and commitment currently experienced within the franchise relationship to inform the resultant findings.FindingsKey findings suggest trust and commitment are limited or non‐existent within franchise systems if the provision of consistent, transparent communication is absent or minimal, increasing the propensity for dysfunctional agent‐based behaviour. Three major antecedents for success of a franchise system exist: goal congruence, organisational culture, and communication. Minimal levels of commitment and trust exist where distance affects the stated antecedents.Research limitations/implicationsThis research is exploratory with the findings providing an imperative for further investigation in the management of human factors within franchise systems as opposed to transactional‐based foci in many current studies. Theoretical development adopting a relationship marketing focus from a distance perspective rather than the transaction‐based approach of a single country adds to existing research. This paper is limited to analysis of franchisees' perceptions. Future research should look at both franchisor and franchisee perspectives.Originality/valueResearch of perceptions of individual franchisees, trust and commitment within the franchise relationship is limited within the Asia‐Pacific region. Findings of possible dynamic differences in the franchisor/franchisee dyad provide initial evidence advancing and informing both academic and managerial practice.

THE ROLE OF COMMITMENT AND RELATIONSHIP SATISFACTION ON FRANCHISEE LOYALTY / The Role Of Commitment And Relationship Satisfaction On Franchisee Loyalty

“…One particularly said that although franchisor provides us all facilities under the franchise agreement, the franchisor did not consider the franchisee's opinion especially in an effort to develop marketing strategy in order to increase product sale. It also stated in past research that outcomes of the research revealed the manifestation of this relationship needed to be personalized of particular interest, the varying levels of commitment amongst respondents (Wright & Grace, 2011). Franchisee commitment significantly affects the satisfaction of the relationship either directly or indirectly.…”

Trust, Commitment And Compliance: A Study Of Franchisee’S Perception Towards The Franchisor

“…Commitment is defined as a key determinant of excellent relationships between two parties where each party have execute their responsibility to each other (De Dreu, 2015). According to Wright and Grace (2011), commitment is the willingness of two parties to comply with the agreed franchise practices and both parties is required to fulfil their respective obligations to each other. Hence, commitment leads to confidence that is needed to stabilise the relationship for both parties (Ferro et al, 2016).…”

Fatores Condicionantes Da Formação De Uma Rede Horizontal Entre Franqueadas

“…Outros pontos decisivos para a manutenção da rede são o apoio da franqueadora, a atuação dela em concorrer ou adquirir lojas de franqueados (DANT; KAUFMANN; PASWAN, 1992) e o estágio do ciclo de vida da relação, em que as franqueadas sentem-se mais independentes conforme a relação evolui e podem apresentar comportamentos deliberados, uma não conformidade ao contrato de franquia (BAUCUS; BAUCUS; HUMAN, 1996;FRAZER, 2001;MUKHERJEE, 2003;WRIGHT;GRACE, 2011). Assim como em outras relações interorganizacionais, o papel da confiança é determinante, influenciado positivamente pela satisfação da franqueada e negativamente por conflitos MORGAN, 2003).…”

“…Em relação à parcela de pesquisas sobre a autonomia dos franqueados, encontram-se discussões acerca dos problemas de agência e de custos de transação relacionados a oportunismo, controles, governança da rede, atividades deliberadas pelos franqueados e ativos específicos investidos por eles, confiança e compromisso (MICHAEL, 2000;MUKHERJEE, 2003;COCHET;DORMANN;EHRMANN, 2008;WRIGHT;GRACE, 2011;JELL-OJOBOR;WINDSPERGER, 2014). Ainda, em sua maioria, as pesquisas têm como pano de fundo a discussão sobre riscos vinculados à atuação dos franqueados, em virtude da reputação da marca da franquia e da qualidade dos produtos e serviços, bem como processos deliberados, discutindo os controles a serem empregados pelos franqueadores.…”