Journal of Internet Banking and Commerce ISSN: 1204-5357
ISSN: 1204-5357
+44-175-271-2024Habib Affes
Department of Economics and Management
Sfax University, Tunisia
Tel: 98418657
Email: managementresearch6@gmail.com
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Franchise Business Model; Perceived Support; Open Communication; Cultural Sensitivity; Normative Expectations; Franchisor-Franchisee Relationship; Quality
The franchise dynamism and the incentives it represents for the economic sector are now becoming extremely important so that, since the early 1980s, there has been a tremendous growth of this business format either in the United States, in Europe or in some regions of Asia, particularly in Japan [1]. Moreover, the franchise scope has been broadened to include several emerging economies, such as the Brazilian and the Chinese ones as it was set by the French Franchising Federation in 2013. Recently, some African countries, such as South Africa, Morocco or even Tunisia, have adopted this form of cooperation [2,3].
The franchise economic and social contribution in a great number of countries throughout the world was widely reported by several authors who discussed the role of the franchise in the development of international entrepreneurship in various sectors [4]. This business model certainly offers several potential benefits for the franchisors and the franchisees although it has never been a success guarantee for businesses. In fact, a weak relationship between a franchisor and a franchisee can lead to the franchise failure, such its termination, its closure or simply the franchisee renunciation. This is likely to encourage the franchise partners to effectively manage the tensions inherent in the franchisor-franchisee relationship to obtain benefits and ensure the partnership success in the long term.
According to Grace [5] relational feelings become weak and then conflicts arise as soon as the franchisees deduce that their expectations are not met. In order to understand the concept of the role of expectations in the context of the franchise, the literature made a fundamental distinction between these various components. This design includes two key elements, such as the macro level expectations, which are also called normative, and the predictive expectations at the micro level. In this paper, the emphasis is put mainly on the normative level. In the franchise context, the normative expectations are largely based on the main advantages related to the franchise which can be considered as an alternative or a unique choice in the business models whereas the predictive expectations are based on the expected performance of a particular franchisor (brand/franchise system). Although the confirmation of the franchise predictive expectations dominates the earlier literature, very little is known about the role of the confirmation of the normative expectations (non-experiential) in the evaluation of the franchise relationships [5,6]. This represents a major challenge because contractors often inquire about the concept of the franchise as a business model before being contractually connected with the franchisor.
This study examines the impact of the confirmation or otherwise of the normative expectations on the evaluation of the quality of the franchiser-franchisee relationship to better understand how the franchisees access, interpret, and evaluate the information provided by the franchisor. To get an answer to this topic, we will study, in a first step, the determinants of the quality of the relationship (the support received from the franchisor, the openness of communication and cultural sensitivity). Then, in a second step, we will test the mediating effect of confirmation or otherwise of the franchisee normative expectations on the relationship between the antecedents and the outcome variables of the franchiser-franchisee’s relationship quality, namely, the triad (confidence, commitment, satisfaction).
The present research tries to emphasize three major research contributions in the field of franchising. The first is about the legitimate use of dependency-power, international trade, and social exchange theories. The purpose behind this is to explain the impact of the antecedents on how franchisees perceive the franchise relationship quality in the entrepreneurial field. This relationship will be measured by the level of trust, commitment and satisfaction. The second contribution lies in an attempt to better clarify the impact of expectations to help a better understanding of the impact of the expectations at the normative level (related to the business model of the franchise) on the subsequent evaluation of the quality of the franchisor-franchisee relationship (predictive level).
The Development of the Relationship Quality and the Power-Dependency, the International Trade and the Social Exchange Theories
The quality of the franchisor-franchisee’s dyadic relationship is a flat-rate assessment of the relationship validity and strength. It is generally regarded as a multidimensional construct that includes confidence, commitment and satisfaction. But even more importantly, the relationship quality is an appropriate indicator for the success of the franchisor-franchisee’s dyadic relationship [7-9]. A literature review helped us identify three different theoretical approaches that have been developed by academic experts in the trade sector, such as relational specialists: the power-dependency theory, international trade and social exchange. A brief overview of these theories is given below to show their relevance to the development of the quality of the franchise relationship.
It should be noted at first that the theoreticians of the "power-dependency" advocate the relationship analysis dealing with the dependence relationships in relation to the power of each partner and the resources to be mobilized in the relationship of exchange between the latter ones [10]. The impact of the company-to-company process has always been dealt with in the literature as being one of the multiple histories of the relational exchange. Actually, within a franchising relationship, one of the fundamental reasons for joining a franchise network is the access to the franchisor’s trademark, to his reputation, to training and marketing support. When the franchisor, in powerful position, plays his role effectively, the franchisee becomes more dependent on the relationship because the opportunity costs to find an alternative will be higher [10-12]. Therefore, the services and support provided by the franchisor are the core foundation of the improvement of the franchise relationship quality.
Any single franchise organization represents multiple individual relationships between the franchisor and the franchisee. The roles within these relationships reflect the actor’s rights and his responsibility. These roles reflect the mutual promises made by the stakeholders during the formation of their relationship. Actually, these promises lead each actor in the exchange process to develop expectations about the others’ behavior. According to the role theory, the fact that each exchange partner learns an appropriate set of behaviors in an exchange context, which will increase the probability of achieving the objectives of each partner and therefore will help the development of the relationship quality [1].
Then, international trade theorists state that the cultural differences between the partners are likely to have an impact on the modes of training and on the sustainability of strategic partnerships [10]. Partners have, therefore, to proactively manage these differences by showing greater awareness of the sensitivity to the local market conditions of the other partner in terms of language, business, management, and political and legal differences [10,12]. Cultural sensitivity is therefore beyond the awareness of these differences since it can also manage them in an effective way. In connection with the franchise background, the franchisor’s cultural sensitivity of can be explained by the adaptation of some decisions relating to the markets and to the local franchisees’ practices. These practices are actually based on an inquiry about how the franchisor approaches the development of a relationship. More precisely, they not only show the franchisor’s commitment in a partnership but also serve to strengthen the local franchisees’ confidence and satisfaction [10].
In any event, the social exchange theory assumes that the partners show their commitment to the relationship through their investment in social interaction and communication. In this context, researchers recognize the particular importance of communication since it facilitates the transfer of knowledge [12]. Effective communication between franchisors and franchisees may, according to Chiou [13], directly and indirectly improve confidence, commitment and overall satisfaction of the franchisees towards the franchise system.
Confirmation or Non-confirmation of the Franchisees’ Normative Expectations and the Organizational Fairness Theory
Although the franchisees’ expectations in the future performance of the unit and the franchise system are non-experiential, they can be measured only in a proportion of the ongoing assessments of the credibility of the franchisor’s promises on the franchise business model. These are the ongoing assessments of the participation in the franchise partnership that inform about the confirmation or invalidation of the franchise normative expectations [5]. On this basis, the organizational fairness theory is a suitable theoretical objective to examine the franchise evaluations of their experience in the franchise partnership.
This theory postulates that individuals should receive benefits or rewards that are proportional to their contributions and personal efforts. Generally, individuals perceive their relationship as fair when the ratio between the input and the output is equivalent to that of their trading partner. The invalidation of the franchisee’s normative expectations before concluding the franchise contract, regarding the future performance of the franchise unit, is based on the evaluation of justice or the fairness in the relationship. More specifically, the franchisees’ assessments focus on the distribution of organizational outputs related to contributions (distributive justice) and on their confidence in the ability of their franchisor to make strategic decisions. Moreover, the use of the procedural rules that support the control of the processes and of the accurate, consistent and unbiased decision making (procedural justice) adopted in a dignified and respectful way (interpersonal justice), is essential to facilitate healthy relationships between the franchisee and the franchisor.
It is worth noting that the franchisees operate in an environment of dependence and information asymmetry. They depend much on the information provided by the franchisor (e.g., assistance in the choice of the local site, the training content and the schedules). As a consequence, the concept of informational justice is particularly relevant in the context of the franchise since the franchisees depend on the franchisors in the use of proper and honest communication.
In the end, as the franchisors’ behavior is evaluated on the basis of a number of dimensions of the organizational justice (distributive, procedural, interpersonal and informational), the gaps between what was promised and what is actually provided, will have an impact on the invalidation of the franchisee’s expectations and will, later, feed the evolution of the relationship destructive behavior, such as the relational dissatisfaction and the apparent conflict [14]. Consequently, on the basis of the assumption that fair relationships are sought, it is suggested that final perceptions of justice and fairness in the franchise relationship guide the invalidation of the franchisee’s normative expectations and affect both the relational quality and the proper functioning of the franchise future exchanges [5].
The Franchisor’s Perceived Support and the Relationship Quality
The success of the franchise system is highly dependent on the franchisor’s ability to collect, understand and share information throughout the network. Moreover, the franchisees are able to access both codified knowledge resources (such as franchise policies, procedures and manuals) and tacit (those arising from the interaction with the franchisors) during the evaluation of the franchise appropriateness [6].
Altinay [10] believe that a franchisor competently assumes the required transactional roles, contributes to the welfare of the entire franchise system and can therefore facilitate a high level of achievement of his partner’s objectives. More specifically, when the franchisee receives satisfactory performance from his franchisor, in terms of training, initial support, financial advice and supply and marketing networks, he realizes that the latter shows a guaranteed commitment to cooperate with him and respect his trade name. As a consequence, this is likely to arouse the sense of unity in the relationship and reduce conflict between the parties. In our research, we define the support received from the franchisor as the extent to which the franchisee believes that his franchisor competently plays his role in supporting the directives and objectives facilities of operationalization and marketing. In this context, the exercise of the role of franchisor effectively can lead to high levels of confidence, franchisees and therefore engagement and satisfaction, to facilitate the development of the quality of the relationship [9,10]. Given the above, we propose the first hypothesis:
H1: The support received from the franchisor is positively correlated with the quality of the franchisor/franchisee dyadic relationship.
In the field of relational exchanges, communication is equivalent to an important tool for companies as it enables them to maintain strong relationships with their partners since it is the basis of social relationships. In his relationship with the franchisee, the franchisor should be careful to ensure effective two-way communication, whether formal or informal. Similarly, he has to be active in communicating with his partners and keep communication open to ensure mutual understanding. Grace [5] define open communication as "the extent to which the franchisee realizes that the franchisor’s communication is fast, timely, relevant, complete and accurate."
In literature, previous research studies relating to relational marketing emphasized the important role of communication in the development of the relationship nature. More importantly, a community of researchers considered communication as an antecedent necessary for confidence, commitment and satisfaction [12,13,15]. In short, all these testimonies form the basis for our second hypothesis:
H2: Open of communication is positively related to the quality of the franchisor-franchisee’s dyadic relationship.
Showing the willingness and knowing the franchisees’ culture requires the franchisor’s possession of considerable amounts of financial, relational and cultural resources. Moreover, bridging the gaps between local and foreign markets is a difficult task which requires the proactive deployment of the available cultural training resources and other relational (Altinay and Brookes) management efforts, 2012. In this context, Altinay [12], suggest that with cultural sensitivity, the franchisors may bridge the market gaps, which would, in turn, promote the franchisees’ confidence.
Altinay [16] pointed out that cultural sensitivity reflects the franchisor’s ability to proceed with an effective cultural exchange with the franchisees on the international markets. The franchisee’s confidence, commitment and satisfaction cannot, therefore, be easily developed without his franchisor’s understanding and adaptation to his corporate culture. In this research, we will adopt the definition developed by Altinay and Brookes [10], which indicates that cultural sensitivity is the measure in which a franchisor adapts his business practices to the nuances of the franchisee’s local market so as to develop and maintain the relationship quality. Therefore, it can be assumed that:
H3: Cultural sensitivity is positively correlated with the relationship quality.
Although the literature has largely backed strong direct and indirect links between the already mentioned key variables, namely (the franchisor’s performance role and open communication) and the relationship quality (confidence, commitment and satisfaction), the relationships of these relationships in the context of the confirmation of the franchisees’ normative expectations remains very little studied. As it was earlier indicated by Grace [5] before concluding a contract, the franchisees have some expectations related to the franchise business model can offer and how they will perform their franchisor in light of these prior expectations. Nevertheless, these expectations are formed on the basis of the information provided by third parties (for example, franchisors, regulators and other franchisees). In a franchise relationship, the franchisor’s performance is usually assessed during the franchisee’s experience at his initial entry. As it has been previously mentioned, the franchisees actually get involved in franchise arrangements with estimates relating to the future performance of their unit (for example, the income of the unit) and the franchise system (for example, the positive development in the recognition of the brand). Validating these expectations should, therefore, reduce uncertainty, minimize the misinterpretation risk of the franchisor’s motivations and behavior and, as a consequence, strengthen both confidence in the franchisor and franchisees’ satisfaction [6].
Very few empirical studies have been carried out to support the theoretical evidence mentioned above. Similarly note the study by Grace [5] which proved that the confirmation of normative expectations has a direct and significant influence on relationship satisfaction and the perception of conflicts
H4: The confirmation of the franchisees’ normative expectations partially mediates the relationship between the perceived performance of the franchisor’s role and the relationship quality.
H5: The confirmation of the franchisees’ normative expectations partially mediates the relationship between open communication and the relationship quality.
H6: The confirmation of the franchisees’ normative expectations partially mediates the relationship between cultural sensitivity and the relationship quality.
In summary, and based on what has been previously stated, we present the contingent model for our research study that synthetically shows the six hypotheses mentioned above. The objective of this paper is to study the impact of the confirmation of the normative expectations on the assessment of the franchisor-franchisee’s dyadic relationship quality. In our conceptual model, we particularly describe the relationships usually raised in the theoretical and empirical literature which explain the guidelines between the variables characterizing this problem (Figure 1).
Figure 1: The detailed conceptual model of the confirmation impact of the franchisees’ normative expectations on the assessment of the franchiser-franchisee’ relationship quality.
In this passage, the focus is on the methodology that works best for our research study. For this reason, we will tackle the issues of the data collection, the sampling, the presentation of the measurement instruments and the data analysis.
Data Collection
The theme related to the determinants of the franchise relationship quality in the context of the franchisees’ normative expectations in Tunisia is a blank field of entrepreneurial studies which was not dealt with by academicians. These statements represent a privilege that supports the originality of our research. Depending on the objective of our research, we think that we have to support the relationship anticipated by the model by using a hypothetical-deductive approach, which goes from the general to the particular, and combined with a quantitative approach. In Tunisia, the lack of statistics complicates the access to information related to development of franchise networks. Since the sampling frame of our survey is specifically composed of franchisees. our choice of developing a database is based on cutting the collection process in two stages. First of all, we have accessed an information base in terms of the major franchises (national and international) implanted in Sfax and gathered from Sfax business centre and the franchise Tunisian Academy. Based on this list, we have subsequently surfed the franchisors’ internet websites to collect details about their franchises’ locations and contacts. We can mention two well-known web sites that have largely helped us gather more information about a significant number of national retailers and foreign located in the place of Sfax and Tunis. This is "www.tunisiefranchise.com" and "www.tn.ac-franchise.com". The use of the database previously collected from websites and online directories, enables us to conduct the final survey via a face to face questionnaire administered to a sample of owners of franchised units operating in the two major cities of Tunisia, Sfax and Tunis. In order to ensure high quality data collection process, personal visits to franchisees were carried out between December 2014 and February 2015. The data collection process continued until the formation of a quota for the participation of 124 franchisees.
Sampling
The obtained sample size includes 124 franchisees operating in a wide range of industries. Of the 124 respondents, 86.2% of the owner-managers are men against 13.7% women. In general, the average age of the franchisee units is 8 years. Most of the franchisees have a franchise experience which varies between 2 and 6 years. The educational levels of the owners of the franchisees units vary between university graduates (73.3%), technical skills (6.4%) and secondary school training (20.1%). In terms of the origin of the franchisor, a significant proportion of franchised units belong to an international franchisor (58.8%); the remainder, 41.1% is owned by a Tunisian franchisor.
The nature of the questions asked in the inquiry instrument requires that the answers be provided by very familiar officials and committed to the aspects of the contractual relationship of the franchise network. During the questionnaire development, it was decided to test it with 8 managers so as to validate the questions it includes. In this context, the following categories are selected as major respondents to our questionnaire: the owner-manager, the owner and the manager (Table 1).
Table 1: The sample characteristics.
| Items | Frequency | Percentage (%) |
|---|---|---|
| Size (Number of franchisees) | 124 | 100 |
| Age of the franchisees’ units (Number of years) | ||
| <8 | 75 | 60.4 |
| 8-16 | 38 | 30.6 |
| 16-24 | 8 | 6.4 |
| >24 | 3 | 2.4 |
| Franchisor’s origin | ||
| Domestic franchisor | 51 | 41.1 |
| The structure of the franchisee’s | 73 | 58.8 |
| Peculiar unit | ||
| Multiple unit | 67 | 54.0 |
| the type of the franchise contract | 57 | 45.9 |
| Franchise corner | ||
| Master franchise | 79 | 63.7 |
| The franchisee’s sex | 45 | 36.2 |
| Man | ||
| Woman | 107 | 86.2 |
| The level of education of the owner of the franchised unit | 17 | 13.7 |
| The educational level of the franchised unit owner | ||
| University graduate | 91 | 73.3 |
| Technical skills | 8 | 6.4 |
| Seondary training | 25 | 20.1 |
The questionnaire designed to collect data specifically includes items that were used in previous studies belonging to franchise literature (Table 2). In general, the basic constructs of our model were measured by means of 5-point liker scale ranging from "1=strongly disagree" to "5=strongly agree" (see Appendix 1).
Table 2: Summary of the construct measure.
| The construct measures | Numbe of items | Original source | Alpha de cronbach |
|---|---|---|---|
| Perceived support | 9 | Altinay et al. (2014) et Grace et al. (2013) | 0.80 |
| Communication | 4 | Grace et al. (2013) | 0.80 |
| Cultural sensitivity | 4 | Altinay et al. (2014) | 0.82 |
| Confirmation of the expectations | 4 | Weaven et al (2014) et Grace et al. (2013) | 0.70 |
| Relationship quality : | |||
| Confidence | 5 | McDonnell et al (2011) | 0.75 |
| Commitment | 5 | Dant et al. (2013) et McDonnell (2011) | 0.81 |
| Satisfaction | 5 | Altinay et al. (2014) et Zelihaeser (2012) | 0.77 |
In this study, two types of perceived media (SUPPOP) are distinguished: The support to facilities and marketing and support to operational guidelines. In order to measure both components of this construct, we have applied 9 items retained from the scales developed by Altinay [12] and Grace [5]. On the other hand, to measure open communication (OUVCOMM), four items derived from the scale of Grace [5] are used. However, the scale used for the measurement of cultural sensitivity (SENSCUL) (four items) was developed by Altinay [12]. Regarding the mediating variable "confirmation of normative expectations" (ATTENOR), the adopted measure is the scale built by Weaven [6] which includes four items.
In order to measure the dimensions of the franchise relationship quality, five items on the scale developed by McDonnell [8] are used to measure confidence (CONFI). Five items derived scales quality from Dant [7] and McDonnell [8] were selected to measure commitment (engaged). To measure satisfaction (SATISF), five items derived from the scales built by Altinay [12] and Zelihaeser [17] were applied.
Given the quality of the endogenous and exogenous variables of the proposed model, a confirmatory approach is used to test it. This makes it easy to present a single model and generate empirical data. Then, a data analysis process consisting of two phases was launched: The preliminary stage includes the examination of the psychometric properties of measurement scales through the analysis of correlation, of the principal component and of reliability. The final phase consists in testing the hypothesis using multiple regression analyses.
The results of the correlations between the model variables show some initial support to the anticipated hypotheses (Table 3). First, the correlation coefficients indicate that the independent variables, particularly, the perceived carrier, open communication and cultural sensitivity are all positively and significantly associated with the relationship quality as a dependent variable, (respectively r=0.359, p 0.01; r=0.407, p 0.01; r=0.293, p 0.01). Similarly, these three independent variables are all positively and significantly correlated with the mediation variable: Similarly, these three independent variables are positively and significantly correlated with the mediation variable: the confirmation of the normative expectations (perceived media: r=0.328, p 0.01; open communication: r=0. 530, p 0.01 and cultural sensitivity: r=0.243, p 0.01). Finally, there is a significantly positive correlation between the confirmation of the normative expectations of franchisees and the relationship quality (r=0.617, p 0.01).
Table 3: Pearson’s correlations matrix.
| The variables | 1 | 2 | 3 | 4 | 5 |
|---|---|---|---|---|---|
| Perceived support | 1.000 | 0.297** | 0.130 | 0.328** | 0.359** |
| Open communication | 0.297** | 1.000 | 0.128 | 0.530** | 0.407** |
| Cultural sensitivity | 0.130 | 0.128 | 1.000 | 0.243** | 0.293** |
| Confirmation des attentes | 0.328** | 0.530** | 0.243** | 1.000 | 0.617** |
| Relationship quality | 0.359** | 0.407** | 0.293** | 0.617** | 1.000 |
Notes: The correlation is significant at: **0.01
The correlation is significant at *0.05; N=124 *0.05 ; N=124 Analysis of the validity and of the measurement scale reliability
It is our responsibility now to ensure that the used measurement instruments are in conformity with the criteria of the psychometric quality. In this sense, we will proceed, at first, to test the reliability of the instruments through by calculating the Cronbach alpha coefficient of each construct. This will serve to assess internal consistency based on the variance/covariance items. The process of this calculation enables us to identify the items that have the lowest internal consistency and also identify the alpha values of every scale without the concerned item. In our study, the alpha calculation for scales (SUPPER, OUVCOMM, CONFI, ENGAG, SATISF) gives satisfactory values that exceed (0.78) (see Appendix 1). This tells us that the items of these constructs help ensure the reliability of their scales. Regarding cultural sensitivity (SENSCUL), one of the four items was dropped from the final analysis, which helped raise the level of alpha from 0.64 to 0.82. The removal of this item does not hamper the justification of the concept of cultural sensitivity. Regarding the normative expectations (ATTENOR), the omission of one out of the four items helps raise the level of the alpha to stage (0.55).
Then, internal validity will be assessed using the statistical method of the exploratory factor analysis (EFA). For this reason, it is necessary to check the suitability of the sampling using the calculation of Kaiser-Meyer-Oklin (KMO) and Bartlett’s sphericity test. In general, the values obtained for the 7 variables in the model (SUPOP, OUVCOMM, SENSCUL,
ATTENOR, CONFI, committed, SATISF) are acceptable, and exceed (0.65) (see appendix 1). This shows that the quality of correlations between the scale items is good, which thus makes us proceed with the ACP. Finally, to test the dimensionality of the constructs of our model, we conducted a principal component analysis (PCA) which helped us to check if the used items of each scale assess the same phenomenon or not. According to the ACP, SUPPER is identified as a two-dimensional construct which has an explained variance rate equal to (58.05) (Table 4). However, the other constructs (OUVCOMM, SENSCUL, ATTENOR, CONFI, engaged, SATISF) are one-dimensional and have an explained variances rate ranging from (55.54) to (75.70). In conclusion, the analysis of the internal consistency, the internal validity and the ACP confirm the validity and strength of the used constructs.
Table 4: Descriptive statistics.
| SUPPER | OUVCOMM | SENSCUL | ATTENOR | CONF | ENGAG | SATISF | |
|---|---|---|---|---|---|---|---|
| Average | 33.78 | 17.07 | 14.08 | 12.17 | 22.03 | 23.75 | 22.19 |
| Standard deviation | 42.82 | 6.39 | 2.56 | 4.81 | 9.13 | 4.00 | 6.75 |
| Var Ex (%) | 58.05 | 64.41 | 75.70 | 60.52 | 58.85 | 56.53 | 55.45 |
| No of items | 9 | 4 | 4 | 4 | 5 | 5 | 5 |
Var Ex (%)=the explained variance
Then, internal validity will be assessed using the statistical method of the exploratory factor analysis (EFA). For this reason, it is necessary to check the suitability of the sampling using the calculation of Kaiser-Meyer-Oklin (KMO) and Bartlett’s sphericity test. In general, the values obtained for the 7 variables in the model (SUPOP, OUVCOMM, SENSCUL,
In the test of the association models between the variables, a multiple regression method with SPSS 18 software was applied (Tables 5 and 6).
Table 5: The regression analysis results of the direct effects.
| VD | Relationship quality (N=124) | β | Student's t | p-value |
|---|---|---|---|---|
| Perceived support | SUP/ORIEOPP | 0.286 | 3.798 | 0.000** |
| SUP/INSCOM | 0.258 | 3.321 | 0.001** | |
| Communication | OUVCOMM | 0.254 | 3.218 | 0.002** |
| Cultural sensitivity | SENSCULT | 0.196 | 2.608 | 0.010* |
| F=16.32 R2=0.33 |
||||
Notes: The regression is significant at the p-value level of **<0.01. The regression is significant at the p-value level of *<0.05. F: Fisher’s test; R: the adjusted R.
Table 6: The results of the mediation effects.
| VD: Relationship quality | M1: VI→M | M2 : VI→VD | M3: VI→M→VD | |||
|---|---|---|---|---|---|---|
| Hypothetical links | β | student’s t | β | student’s t | β | student’s t |
| LH1 : SP→CAN→QR | ||||||
| SUP/ORIEOPP | 0.328 | 3.875 | 0.286 | 3.798 | 0.185 | 2.663 |
| SUP/INSCOM | 0.155 | 1.831 | 0.258 | 3.321 | 0.279 | 4.192 |
| ATTENOR | _ | _ | _ | _ | 0.513 | 7.283 |
| LH2 : COMM→CAN→QR | ||||||
| OUVCOMM | 0.530 | 6.899 | 0.254 | 3.218 | 0.111 | 1.328 |
| ATTENOR | _ | _ | _ | _ | 0.559 | 6.672 |
| LH3 : SENCUL→CAN→QR | ||||||
| SENSCULT | 0.243 | 2.768 | 0.196 | 2.608 | 0.152 | 2.103 |
| ATTENOR | _ | _ | _ | _ | 0.580 | 8.015 |
Notes: M1: VI→M: Model 1: effect of the mediation variable on the independent variable. M2: VI→VD: Model 2: the direct effect of the dependent variable on the independent variable. M3: VI→M→VD: Model 3: the indirect effect through the mediation variable on the confirmation of the normative expectations.
Direct effect test: To test the direct associations between the constructs, it seemed necessary, at first, to assess the model showed in Table 5, which includes three independent variables (the support from the franchisor, open communication and cultural sensitivity) and the dependent variable (relationship quality). The results indicate that the model is well adjusted (F=16.32), and has a reliable tool to explain the quality of the franchise relationship (R2=0.33). This means that the independent variables are predictors of relationship quality and show 33% of its variance. Column of the t-student ratios revealed the existence of a significant and positive relationship between the three explanatory variables and the dependent variable of the estimated model. This supports the validity of hypotheses H1, H2 and H3. Therefore, the support received from the franchisor is identified in terms of support to the operational guidelines (SUP / ORIEOPP: t=3.798, p 0.01) and to facilities and marketing (SUP / INSCOM: t=3.231, p 0.01) as a major antecedent of the franchisor-franchisee relationship quality. In the same context, open communication is an antecedent of the relationship quality (OUVCOMM: t=3.235, p 0.01). This means that the more anxious the franchisor is to maintain open communicative approaches in the franchise relationship, the higher the levels of the franchisee’s confidence, commitment and satisfaction will be. The cultural sensitivity variable (SENSCULT) is associated with a β equal to (0196) and a t-student equal to (2.562, p 0.05). This indicates that this variable significantly and positively contributed to the explanation of the franchisor-franchisee relationship quality. Therefore, cultural sensitivity also turns out to be an antecedent to the relationship quality in terms of franchisees’ confidence, commitment and satisfaction.
The mediation effect test: In this approach, the partial mediation effects of the normative expectations were tested by employing the analytical specifications developed by Baron and Kenny [18]. Three regression models were derived to test if the four significance mediation conditions defined by Baron and Kenny [18] are fulfilled (Table 6). Through the first model M1, the objective is to look for the first condition to be met which relates to the causal links between the three independent variables (perceived support, communication, cultural sensitivity) and the mediator (normative expectations). The second regression model M2 tests the direct effect of the three independent variables on the dependent variable (relationship quality) to therefore check the fulfillment of the second condition. On the other hand, the third regression model M3 is designed to check the interpolation of the last two conditions that assume, firstly, that the mediator impacts the relationship quality if the effect of each independent variable on the relationship quality is controlled. Secondly, the impact of each independent variable decreases while statistically controlling the effect of the normative expectations on the relationship quality. Generally, the results of the coefficients calculated in the three regression models meet the four conditions of the mediator significance, which are specified by Baron and Kenny [18].
Actually, the results of the analysis related to the first hypothetical link LH1 indicate the existence of a partial mediation of normative expectations (ATTENOR) between the first component of perceived support (SUP/ORIEOPP) and the relationship quality because the inclusion of the normative expectations in the third regression model M3 led to the weakening of the effect of SUP/ORIEOPP on the relationship quality (β=0.185; t=2,663). As for the second component of perceived support (SUP/INSCOM), it seems that it has no significant effect on the franchisees’ normative expectations (t=1,831). Therefore, it can be deduced, for example, that there is no obvious mediation between the SUP/INSCOM and the relationship quality since the first condition is not met. These findings lead to the partial validation of H4. Then, the estimation of the three regression models related to the second hypothetical link LH2 leads to significant results that support the existence of a perfect partial mediation of the normative expectations. By statistically controlling the normative expectations, it seems that the effect of open the communication in the third model M3 is weaker and insignificant (OUVCOMM: β=0.111; t=1.328), which, therefore supports the validity of H5. Finally, the obtained results helped assert the validity of the causal link presented by LH3 and the three estimated regression models (the four conditions are met). As a result, the franchisees’ normative expectations are identified as a partial mediator that helps explain a part of the effect of cultural sensitivity on the relationship quality. It follows that H6 is also validated.
Raising the levels of the franchisees’ confidence, commitment and satisfaction is of a major importance for the franchisors who strive to build healthy franchise relationships for long periods of time. However, academics have so far not fully taken into account the assessment of the franchise relationship in the context of a franchisee’s non-experiential expectations and the advantages offered by the company’s franchise model. For this reason, we have designed this research to study the franchisee’s perception of the relationship quality (in terms of trust, commitment and satisfaction) and its antecedents (namely, the received support, open communication and cultural sensitivity). Our approach is evaluated in the light of the confirmation or non-confirmation of the normative expectations (i.e.. the expectations of the franchise business model). As a result, we assumed a model that enables to consider the direct and indirect effects of the antecedents associated with the evaluations of the franchises on the franchise relationship quality. In the discussions that follow, we will, first, discuss the findings relating to the direct effects of the franchisor’s perceived support, open communication and cultural sensitivity in the hypothetical model. Subsequently, we will conclude with a discussion on the mediation role of the confirmation of the normative expectations in the tested model.
The results achieved in this research study identified three major antecedents of the franchisor-franchisee relationship quality. In fact, our study supports a statistically positive and significant link between the perceived support and the relationship quality. This finding reinforces, to some extent, that of Altinay [12], Grace [5] and Altinay and Brookes [10]. This suggests that the franchisors should efficiently perform their partnership roles by providing support to the guidelines and operational objectives and marketing, such as support facilities, continuing education and treatment of problems in order to maintain better quality relationships and high levels of trust, commitment and satisfaction of their franchisees. Moreover, a positive and significant relationship between open communication and the relationship quality was found, which confirms the previous findings of Grace [5] and Chiou [13]. Our study showed that open communication is actually very important in strengthening the franchisees’ confidence, commitment and satisfaction with their franchise system. To sum up, it can be said that the franchisors have to understand that their timely and accurate provision of information, both formally and informally, to their partners is the basis for the consolidation of sustainable good franchise relations. Maintaining open and two-way communication is thus very important to build the franchisees’ confidence and growing satisfaction and strengthen their intention to permanently stay in the franchise system. In accordance with the findings of Altinay [12] and Altinay and Brookes [10], our results proved the existence of a causal link between cultural sensitivity and the relationship quality. Our approach showed that the development of the relationship quality requires the franchisor’s cultural investment by. Given the cultural differences between the home and the host markets, the franchisors should be aware and sensitive to the local market conditions of his franchisee in terms of language, business practice and legal and political differences so that he can gain his confidence, commitment and satisfaction.
The antecedents and "out-comes" or outputs of the confirmation of the normative expectations
In the context of the franchise partnerships, it is the franchisee’s expectations on entering the system that actually identify the perceived quality of future relationships [5,6]. Our results clearly confirm the statement that there is a positive relationship between the confirmation of the normative expectations and the subsequent evaluations of the relationship quality. Actually, the confirmation of the franchisee’s non experiential expectations would indicate that the franchisor keeps his promise on the franchise business model. This means that the franchisor has met most of the franchisee’s conditions in terms of training and feedback on the performance of his unit, the degree of autonomy, the target setting ..., which generates a positive emotional appreciation of the franchisee, the relationship equality and the franchise relationship strength. On this basis, the benefits of the company’s franchise model presented in this study (perceived support, open communication and cultural sensitivity) confirm the franchisees’ normative expectations and help enrich the literature on the relational exchange.
The results of our global model suggest that the franchisee’s initial expectations are confirmed (or not confirmed) depending on the availability and quality of the information provided by the franchisor. These findings are the results of strong positive relationships between the franchisor support to the operational guidelines, open communication and normative expectations. This corroborates the results of Weaven [6], and Grace [5]. Actually, the evaluations of the quality of the services provided and of the franchisor’s interaction experience by the franchisee (the periodicity and the quality of formal and informal information shared within the network), whether confirm or infirm his initial expectations of the main benefits associated with the business model of the normative franchise.
Furthermore, our study shows another antecedent confirmation of the normative expectations. It is a positive causal link between cultural sensitivity and confirmation of the initial expectations in the tested model, something that was not dealt with in the prior literature. When the franchisee believes that his partner is willing and able to adapt to the Tunisian culture in terms of language, procedures and policies and legal regulations, he will form a positive judgment on the franchisor and his performance. Therefore, this factor represents a third major benefit relating to the franchise business model that determines the validation of the franchisee’s normative expectations.
Ultimately, our results show that the most important role in the validation of the normative expectations is that of supporting the operational guidelines and open communication. This assumes that the non-experiential confirmation of the expectations is based, to a large extent, on the quality of services and the relevance of the information provided by the franchisor. This is not surprising given that the franchisee, upon entering the system, is already in a position of dependence in relation to the franchisor. He must therefore rely heavily on the services provided (e.g. technical and procedural support, treatment problems, initial and continuous management business) and unilateral information, which is controlled by the franchisor in the decision-making.
The results show that the effects of the operational guideline support, open communication and cultural sensitivity are partially mediated by the confirmation of the franchisees’ normative expectations. However, the mediation effect of the initial expectation confirmation is more important and clearer when it is controlled in the relationship between perceived support and communication. This seems to be logical since the only reference framework of a franchisee in the final evaluation of his selected franchise business model lies in the franchisor’s perceived role. This is a major challenge for the franchisors who should recognize that the effectiveness of their role depends on the achievement of promises, not only according to how they are explicitly formulated to the franchisees but also according to how they are implicitly perceived by them in relation to the business model.
In the end, our study raises the importance of two main points: firstly, it should be noted that the key characteristics of the franchise business model lie in the perceived efficiency of the franchisor’s role in the phases of pre and post partnership. More specifically, constant support providing in terms of guidance and choice of operational objectives, ability and willingness to adapt to the franchisee’s local market culture and the conservation of open and transparent communication, are the key benefits of the franchise business model which is made so attractive for potential entrepreneurs. Secondly, this paper raises the importance of the franchisee’s normative expectation factor. When they are not fully controlled by the franchisor, these expectations can weaken the franchisee’s confidence, satisfaction, and commitment towards the franchise system and, therefore, can alter the franchisor-franchisee relationship quality.
As a result, this research gives a number of implications for both the franchisors and the franchisees. Firstly, franchisors should make great efforts to devote some resources to continuously improve the assistance to the operational guidelines, the continuous training and marketing for the franchisees. Moreover, they should adopt a flexible approach for local markets while taking into account the cultural differences. Open and transparent communication at the stages of pre and post partnership is also important in facilitating the learning between the franchisors and franchisees so that the latter ones will be given a clear meaning of the guidelines and the relationship quality will be improved.
It is worth noting that our study indicates that the confirmation of a franchisee’s normative expectations plays an important role in mediating between the assessment of a franchisee about the effectiveness of his franchisor’s role (i.e.. perceived support, open communication and cultural sensitivity) and the franchisor-franchisee relationship quality (confidence, commitment and satisfaction). In this context, our results suggest that the relational behavior is identified on the basis of the franchisee’s needs and desires at a given point. Therefore, the perception of a franchisee of the quality of the franchise relationship can lead to subjective assessments based on personal needs rather than objective assessments with reference to equity in the relationship. Finally, it is recommended that future researchers study both the accompanying the confirmation impact of the franchisees’ normative and predictive expectations so as to enrich the knowledge on the manner in which the validation of the franchisees’ expectations affect the assessment of the relationship quality.
The franchise became a dominant form of retail trade everywhere in the world. However, due to the complex nature of the franchise relationship in which the partners are often affected by conflicting objectives, and the levels of the franchisee’s confidence, commitment and satisfaction are often difficult to maintain. From the franchisee’s point of view, the improvement of the relationship quality depends on the franchisor’s actions. It is, primarily, about the ability of the latter to fulfill his partnership commitments, to show his cultural sensitivity and to communicate with his franchisee in an efficient way. Actually, the franchisee pays the franchisor considerable amounts of money to get the right to reproduce his business concept. However, the franchisors should keep in mind that the key to promote the mutually beneficial franchise relationships lies in the understanding of the composition of the franchisee’s initial forecast associated with the franchise as a business model. The confirmation or the rejection of these expectations plays a major role in the development of the perception of the services provided by the franchisor to significantly reduce the surprises and disappointments of the franchisees and considerably improve their confidence levels, their satisfaction, and their intention to continue in the relationship. Future research in the field of relational exchanges, expectations, and individual decision making, will help the franchisors best meet the management practices and maintain their business relationship, which is a new research avenue.
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