Antecedents and consequences of franchisee interaction in a food service setting

Abstract

Recently there has been increased growth in the franchise sector, particularly in the food service category. Previous studies have focused primarily on customer behavior; there have been relatively few studies examining franchisee experience with the franchise brand. Therefore, this study focuses on the motivations, interactions with franchisors and customers, and the resultant effects on business outcomes from the perspective of the franchisee. A self-reporting online survey was implemented to collect data from a sample of 180 restaurant franchisees in the United States. We analyzed the data with partial least squares structural equation modeling. Our results showed that the motivation (both intrinsic and extrinsic) levels of franchisees affected their interactions with franchisors and customers. Intrinsic motivation had a stronger effect on franchisee interaction than extrinsic motivation. Also, franchisee interaction led to positive outcomes, including satisfaction with franchisors, continuous behavioral intentions, and lifetime value to the firm. For franchisees, the impact of their interactions with customers typically is higher than the impact of their interaction with franchisors. Thus, the current study highlights the importance of franchisee motivation by examining the antecedents and consequences of franchisee interaction with franchisors and customers.