Franchisor–Franchisee Relationship Quality and Performance: Influence of Personality Traits

Abstract

Literature in franchise has virtually ignored the role of psychological aspects on firm results. The present study aims to examine the influence of franchisees’ personality on franchisor–franchisee relationship quality and financial performance. This study used a self-report survey from 342 franchisees selected from 3 franchise networks. Personality was represented by the Big-Five personality traits: extraversion, agreeableness, conscientiousness, emotional stability, and imagination. Relationship quality was conceptualized through a second-order construct (trust, commitment, and satisfaction), while financial performance was represented by sales growth and profitability. A Partial Least Squares (PLS) structural equation model was conducted. Three personality dimensions produced the predicted effect on relationship quality—agreeableness (positively), emotional stability (positively), and imagination (positively). Financial performance was affected by conscientiousness (positively), emotional stability (positively), and imagination (positively). As expected, relationship quality presented a positive and significant effect on financial performance. Results indicate that personality does influence relationship quality and performance in a particular manner in the Brazilian context, suggesting that factors such as culture and market stability may have influence on the relationship between personality traits and both relationship quality and financial performance.