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The Role of Trust in Franchise Organizations



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The Role of Trust 1 The Role of Trust in Franchise Organizations Michael H Dickey Dickey Analytics LLC D Harrison McKnight Michigan State University Joey F George Florida State University Abstract Purpose This study examines how two types of trust affect five key franchisee attitudes behaviors within a setting where franchisees have strong contractual ties to the franchisor The five attitudes behaviors are identification and satisfaction with the franchisor compliance and non compliance with franchisor directives and perceived relationship quality These attitudes behaviors were chosen because research has found each to affect franchise performance Design Methodology Approach Our model features two trusting beliefs which influence attitudes behaviors The study gathers US franchisee questionnaire data then analyzes the model using partial least squares techniques Findings Trusting belief competence was found to reduce non compliance with the franchisor and also increase identification with the franchisor Both trusting belief competence and trusting belief honesty were found to enhance satisfaction with the franchisor and perceived relationship quality Neither of these two trusting beliefs was found to influence compliance with franchisor directives Perceived mutual commitment appears to strongly influence both trusting beliefs whereas length of time as a franchisee does not The Role of Trust 2 Research Limitations Implications The findings support relational contracting theory showing that even within a contract trust exerts a significant influence on vital franchisee attitudes Other research shows these attitudes behaviors influence franchise performance though the present study does not measure performance Practical Implications The results suggest franchisee trust is key to the ongoing franchise relationship Hence franchisors should try to build franchisee trust They can do so by enhancing mutual commitment and by supplying well conceived new products and marketing



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