The franchisor-franchisee relationship represents a partnership conducted as a form of relational exchange. As such, the strengthening of the franchisor-franchisee relationship, such as through expansion of individual franchisees' businesses, involves a sharing of benefits and costs. Accordingly, of particular interest to franchise owners is the balance between the payments made to the franchisor (that is, franchisee costs) and the “value” (that is, franchisee benefits) received in return. Moreover, consistent with partnership theories, franchisees are expected to remain in the relationship as long as they perceive to receive adequate value for their contributions to the franchisor. Recognizing that franchisees' perceptions of value of services received versus payments made to the franchisor may change over time, it is important that franchisors effectively manage franchisee perceptions of the value received from the franchisor. Unfortunately, research on franchisees' perceptions of their franchisors is scant. As a first step to filling this gap in the understanding of franchisee-franchisor relationships, empirical research will examine whether franchisee perceptions of franchisor value change over time. In essence, it is the aim to answer the question, “Does the strength of perceptions of value assessment change over time?” More specifically, examination of single-unit and sequential multi-unit franchisees' perceptions of value received from the franchisor at the present time and compare these assessments to expectations for the future and to expectations they recall from their past.
Read full abstract