The impact of economic exchange, social exchange, mutual interest, and self-interest on franchisees’ behaviour

Abstract

Given the fierce and rising competition among food franchise brands, the relationship between franchisees and franchisors is critical. This study aims to examine the role of the franchisor-franchisee relationship in the formation of franchisees' commitment to franchise brands, especially the relative importance of multidimensional relationship constructs (i.e. economic exchange, social exchange, mutual interest, and self-interest) on franchisees' behaviour. Using 266 data points from U.S. food franchisees, the proposed model was tested with SmartPLS. The results show that social exchange most strongly influences franchisees' satisfaction with franchise brands, followed by economic exchange and mutual interest. However, perceived self-interest of franchise company does not significantly influence satisfaction. Satisfaction leads both affective and calculative commitment in franchisees. This study contributes to existing literature by structuring our understanding of the varying roles of multidimensional relationships in the franchise context. Franchise companies can benefit from this research through better knowledge of how to manage relationships with franchisees.