The relationship quality in franchise networks: Is it important to performance?

The concept of relationship quality evolved from relational marketing theory, and provided the impetus for a paradigm shift from transactional relationships to more cooperative and service-centred relationships in business-to-business processes. In the marketing literature, relationship quality has been considered a key component in relationship marketing and business-to-business relationship exchange such as buyer-seller, exporter-importer and franchisor-franchisee. In franchising, the key to a successful franchise system is dependent on the effectiveness of franchise relationship management where both parties are characterized by mutual interdependence and cooperation. Despite the importance of this topic in franchising, very little is known about how to develop effective franchisor-franchisee RQ and how it impact performance/loyalty. Therefore, this paper investigates relationship quality in franchise networks towards the firms’ performance and loyalty from a franchisee‘s perceptive. It also discusses three elements of the franchisor-franchisee relationship quality namely: trust, commitment and satisfaction. The paper examines the interactions of relationship quality towards a firm’s performance and loyalty in the franchise network