The Effects of Standardization and Trust on Franchisee's Performance and Satisfaction: A Study on Franchise Systems in the Growth Stage

Jyh‐shen Chiou and Cornelia Droge

Journal of Small Business Management, 2015, vol. 53, issue 1, 129-144

Abstract: Franchise systems aim to capitalize on both economies of scale and the benefits derived from localized operations. Although franchisees can be considered small businesses with some independence and local knowledge, compliance with system standardization may be critical to achieving scale benefits, as well as realizing and then maintaining the desired image during the growth stage of the franchise life cycle. However, standardization requirements from the franchisor demand that franchisees make specific investments in the system, which make franchisees more vulnerable to the franchisor. Therefore, whether a franchisee can trust the franchisor becomes an important factor that facilitates the relationship between standardization requirements and franchisees' overall sales and service performance in the market. This research focuses on franchisees in a growing franchise system and examines how the standardization requirements, trust in the franchisor, and the interaction term affect the sales and service performance of a franchisee and ultimately the franchisee's satisfaction. The findings support the hypotheses that, first, the standardization requirements positively affect both sales and service performance. Second, trust not only has main effects on satisfaction and performance constructs but also moderates positively the relationships between standardization requirements and sales/service performance.

Date: 2015
References: Add references at CitEc
Citations:

Downloads: (external link)
http://hdl.handle.net/10.1111/jsbm.12057 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:taf:ujbmxx:v:53:y:2015:i:1:p:129-144

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/ujbm20

DOI: 10.1111/jsbm.12057

Access Statistics for this article

Journal of Small Business Management is currently edited by Eric Liguori

More articles in Journal of Small Business Management from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().