Inter‐organizational trust in franchise relationships and the performance outcomes

Abstract

PurposeThe purpose of this paper is to examine performance outcomes of inter‐organizational trust in franchisor and franchisee relationships in the fast‐food industry in Turkey.Design/methodology/approachThe survey was conducted in two major cities in Turkey: Ankara (the capital and second largest city in Turkey) and Eskisehir (a major city 200 kilometers to the West of Ankara). A total of 103 questionnaires were administered to franchisees located at shopping malls in both cities. A total of 87 usable questionnaires were received, yielding a response rate of 84 percent.FindingsTrust is found to be positively related to cooperation and satisfaction, and negatively related to transaction costs. The duration of relationship is negatively related to transaction costs. Levels of trust, cooperation, satisfaction and transaction costs have not differed significantly on the basis of franchisor's origin or respondent's position.Research limitations/implicationsThis empirical study investigates only the perspective of franchisees in the dyadic relationship of franchisor‐franchisee in one industry (fast‐food) in two major cities of a country.Originality/valueThe study contributes significantly to an overall understanding of the function of trust for successful franchise channel relationships, and is the first study to address performance outcomes and trust issues in the fast‐food industry in Turkey.