Performance implications of marketing agreement, cooperation, and control in franchising

Abstract

ABSTRACT The affinity between franchisees and their franchisor represents a captive marketing channel relationship, requiring a mutually well-managed partnership for long-term success and sustained performance. The authors argue that franchisee social satisfaction and financial performance can be enhanced through greater strategic marketing agreement and operational marketing cooperation with their franchisor. Primary data were collected through a survey study of U.S. franchisees. Results from structural equation modeling indicate that both strategic agreement and operational cooperation positively affect franchisee satisfaction. Furthermore, satisfaction directly enhances as well as mediates benefits to performance. Franchisor marketing decision control is identified and tested as a boundary condition.