The Franchisor/Franchisee Relationship: The Antecedents and Outcomes of Perceived Franchisor Support

Franchising is an organizational system that provides the franchisor with needed capital for expansion and the franchisee with expertise and knowledge to operate a local outlet (Windenhausen & Joyce 1977). It is, therefore, one of the approaches firms are turning to in order to increase their business. Franchising is more complex than a traditional business relationship because it is legally binding (Bernstein 2004). Moreover, the complexity of this relationship warrants a closer look from the perspective of the franchisee since it is the franchisees’ perception of the work environment which has an effect on their motivation and satisfaction with the franchisor. The first essay applies the theory of perceived organizational support from the management and sales literature to examine the support and climate issues that affect the franchisees’ perception of support from the franchisor (perceived franchisor-franchisee support). Specifically, the antecedents examined are the four dimensions of organizational climate: initiating structure, leadership consideration, autonomy, and reward orientation, as developed by Schul, Little, and Pride (1985), and brand value/recognition as partially mediating the relationship between the attitude toward advertising and perceived franchisor support. The second essay is an exploratory study which examines perceived franchisor support and power leading to conflict or reductions in conflict in the franchisor/ franchisee relationship. The study also uses organizational support theory to further examine predictors of conflict in this relationship. Specifically, it looks at how coercive and non-coercive power (reward, referent, expert, and legitimate) plays a role on conflict in the relationship. The essays were tested using a sample of 208 franchisees collected from a large firm (Worldwide Panel) that specializes in panel data. The two studies provide the franchisor with an overview of this relationship and the differing variables that may affect it. The results enable the franchisor to have a better understanding of the type of support and climate the franchisee perceives as supportive. It will also provide them with the information regarding the most appropriate type of power to reduce conflict. This knowledge will help franchisors to strengthen the relationship with their franchisees and benefit both parties financially