A exploratory study of trust, compliance, communication and power in franchise relationships

Abstract

This thesis examines four relationship building characteristics within a franchise relationship that are essential to the formation and on-going successful partnership. The main focus is to specifically explore these relationship building characteristics that enhance the franchisorfranchisee relationship, by placing particular emphasis on trust, compliance, communication and power. Ensuring that the franchisors standards have and are being complied with, and that each participant is able to realise their shared and mutual goals of financial success, that enables the franchise network to grow. There were twelve participants interviewed for this study, these interviews where semistructured which allowed participants to openly discuss each question based on their individual experiences. Through the use of Atlas software, specific codes were generated to identify common themes across the interviews. These codes were further classified into specific themes and categories that assisted the researcher in correctly deducing results from the data obtained. The research findings showed that the foundation of the franchise relationship is trust, communication and the judicious use of power. Once these relationship building characteristics have been established it will allow individual and shared goals to be achieved in the relationship. Trust and communication are closely linked, the one cannot exist without the other. Power shifts are experienced between the parties and is dependent on the situation, the knowledge and experience of the franchisor or franchisee. Compliance is independent and governed by terms and conditions stipulated within the franchise agreement, other than through opportunistic behaviour, compliance is not influenced by the other relationship building characteristics. The study found that although trust and compliance are important to a successful relationship, they are not reliant on each other these two characteristics are mutually exclusive. Compliance is particularly interesting as this characteristic is one of the elements which is controlled by the signed contractual agreement. Communication and knowledge exchange relied on there being a trustful relationship, in which knowledge could be exchanged between both parties.