FRANCHISOR-FRANCHISEE RELATIONSHIP QUALITY: TIME OF RELATIONSHIP AND PERFORMANCE

VAROTTO, LUÍS FERNANDO; PARENTE, JURACY GOMES

doi:10.1590/S0034-759020160603

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FORUM • Rev. adm. empres. 56 (6) • Nov-Dec 2016 • https://doi.org/10.1590/S0034-759020160603 copy

FRANCHISOR-FRANCHISEE RELATIONSHIP QUALITY: TIME OF RELATIONSHIP AND PERFORMANCE

Qualidade do relacionamento franqueador-franqueado: Tempo de relacionamento e desempenho

Calidad de las relaciones franquiciador-franquiciado: Tiempo de relaciones y desempeño

Authorship SCIMAGO INSTITUTIONS RANKINGS

ABSTRACT

Franchise literature disputes how the relationship between franchisors and franchisees develops over time. Traditional lifecycle theory views relationships following an ascendant curve, in which relationship quality and performance strengthen over time. Another perspective better reflects the peculiarities of the franchisor-franchisee relationship, indicating that relationship quality in franchise systems follows a U-shaped curve. There is also limited research on the moderating effect of time on the relationship between relational variables and outcomes. This study sheds light on the influence of relationship duration on relationship quality and financial performance in the franchisee-franchisor relationship. Using a self-report survey from a sample of 342 franchisees, mean and regression analyses are conducted to test relationships. Results confirm the time effect on franchisor-franchisee relationship quality and performance, but the hypothesized shape of relationship phases is only partially confirmed. Moreover, time has a positive moderating effect on the impact of relationship quality on financial performance.

KEYWORDS
Franchise; relationship quality; financial performance; U-curve theory; time of relationship

Construct	Item	Factor loading	Composite reliability	Cronbach’s Alpha
Commitment	We are very committed to the relationship with our franchisor	0.887	0.96	0.96
	I enjoy working with this franchisor	0.823
	I feel as though the franchisor and I are “in it together”	0.894
	It feels like the franchisor and I are constantly doing something for each other	0.810
	I feel that the values of this franchise system match my own	0.874
	We try our best to maintain our relationship with our franchisor	0.807
	We feel proud to belong to this franchise system	0.862
	We intend to continue functioning as a franchisee of our franchisor	0.667
	We have a mutually beneficial relationship	0.834
	The franchisor and I get along well together	0.855
	The franchisor and I tend to share similar values	0.843
Satisfaction	Overall we consider our relationship with the franchisor to be: Satisfying	0.847	0.96	0.94
	Overall we consider our relationship with the franchisor to be: Friendly	0.806
	Overall we consider or relationship with the franchisor to be: Considerate	0.860
	Overall we consider our relationship with the franchisor to be: Cordial	0.874
	Overall we consider our relationship with the franchisor to be: Supportive	0.873
	Overall we consider our relationship with the franchisor to be: Fair	0.906
	Overall we consider our relationship with the franchisor to be: Healthy	0.893
Trust	I can rely on my franchisor to keep the promises they make to me	0.894	0.96	0.96
	I can count on my franchisor to be honest in its dealings with me	0.928
	My franchisor can be counted on to do what is right	0.899
	My franchisor is sincere in its dealings with me	0.918
	My franchisor is a company that I have great confidence in	0.865
	My franchisor is a company that stands by its word	0.917
Sales growth	Compared to other stores in this region, its sales growth is (if you have more than one unit measure the average):	0.934	0.91	0.80
Profitability	Compared to other stores in this region, its profitability is (if you have more than one unit measure the average)	0.892

Relationship phases	Value label	Number
1	Honeymoon	40
2	Routine	87
³	Crossroads	59
⁴	Stabilization	156

	Relationship phases	Mean	Standard deviation	Number
Relationship quality	Honeymoon	5.96	0.82	40
	Routine	5.76	1.23	87
	Crossroads	5.9	0.97	59
	Stabilization	6.12	1.04	156
	Total	5.97	1.07	342
Performance	Honeymoon	3.25	0.52	40
	Routine	3.10	0.72	87
	Crossroads	3.32	0.78	59
	Stabilization	3.35	0.82	156
	Total	3.27	0.76	342

	Phases	Number	Mean rank
Relationship quality	Honeymoon	40	155
	Routine	87	153.57
	Crossroads	59	160.03
	Stabilization	156	190.07
	Total	342
Financial performance	Honeymoon	40	166.99
	Routine	87	151.94
	Crossroads	59	177.65
	Stabilization	156	181.24
	Total	342

	Relationship quality	Performance
Chi-square	10.308	5.505
Sig.	0.016	0.138

Phases (1)	Phases (2)	Mean difference (1-2)	Standard error	Significance
Honeymoon	Routine	0.2	0.2	0.76
	Crossroads	0.05	0.22	1
	Stabilization	-0.16	0.19	0.82
Routine	Honeymoon	-0.2	0.2	0.76
	Crossroads	-0.15	0.18	0.85
	Stabilization	-0.36	0.14	0.05
Crossroads	Honeymoon	-0.05	0.22	1
	Routine	0.15	0.18	0.85
	Stabilization	-0.22	0.16	0.54
Stabilization	Honeymoon	0.16	0.19	0.82
	Routine	0.36	0.14	0.05
	Crossroads	0.22	0.16	0.54

	Phases	Number	Mean rank
Sales growth	Honeymoon	40	188.90
	Routine	87	159.15
	Crossroads	59	171.92
	Stabilization	156	173.77
	Total	342
Profitability	Honeymoon	40	147.06
	Routine	87	147.98
	Crossroads	59	180.68
	Stabilization	156	187.41
	Total	342

	Sales growth	Profitability
Chi-square	3.090	13.553
Significance	0.378	0.004

Phases (1)	Phases (2)	Mean difference (1-2)	Standard error	Significance
Honeymoon	Routine	0.02	0.162	0.999
	Crossroads	-0.28	0.174	0.374
	Stabilization	-0.34	0.150	0.109
Routine	Honeymoon	-0.02	0.162	0.999
	Crossroads	-0.31	0.143	0.146
	Stabilization	-0.37*	0.114	0.008
Crossroads	Honeymoon	0.28	0.174	0.374
	Routine	0.31	0.143	0.146
	Stabilization	-0.06	0.130	0.967
Stabilization	Honeymoon	0.34	0.150	0.109
	Routine	0.37*	0.114	0.008
	Crossroads	0.06	0.130	0.967

	Relational variables	Honeymoon	Routine	Crossroads	Stabilization
Blut et al. (2011)Blut, M., Backhaus, C., Heussler, T., Woisetschläger, D. M., Evanschitzky, H., & Ahlert, D. (2011). What to expect after the honeymoon: Testing a lifecycle theory of franchise relationships. Journal of Retailing, 87(3), 306-319. doi:10.1016/j.jretai.2010.06.003 https://doi.org/10.1016/j.jretai.2010.06...	Relationship Quality^* * Mean of the constructs satisfaction, trust, and commitment. (7 point Likert-scale)	4.95	4.19	4.15	4.69
This study	Relationship Quality (7 point Likert-scale)	5.96	5.76	5.90	6.12
Blut et al. (2011)Blut, M., Backhaus, C., Heussler, T., Woisetschläger, D. M., Evanschitzky, H., & Ahlert, D. (2011). What to expect after the honeymoon: Testing a lifecycle theory of franchise relationships. Journal of Retailing, 87(3), 306-319. doi:10.1016/j.jretai.2010.06.003 https://doi.org/10.1016/j.jretai.2010.06...	Performance (7 point Likert-scale)	5.00	4.23	4.34	4.93
This study	Performance (5 point Likert-scale)	3.25	3.10	3.32	3.35

Fundação Getulio Vargas, Escola de Administração de Empresas de S.Paulo Av 9 de Julho, 2029, 01313-902 S. Paulo - SP Brasil, Tel.: (55 11) 3799-7999, Fax: (55 11) 3799-7871 - São Paulo - SP - Brazil
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[TFN1] Source: Software SPSS 18.0