The Dual Role of Communication in Franchise Relationships: A Franchisee Perspective

Abstract

Although the role of communication in franchise relationships is well recognized, it is not well understood. This paper proposes two higher‐order latent constructs—relationship positivity and relationship negativity—each of which is reflected in four first‐order constructs. The paper investigates the influence of communication on both positivity and negativity simultaneously. Authors collected data from 300 franchisees of a franchise system in Korea, and estimated a structural equation model to test the hypotheses. Results demonstrate the dual influence of communication—it enhances positivity and reduces negativity. More importantly, and somewhat surprisingly, communication is more effective at enhancing positivity in a relationship than at reducing negativity.

Notes

10. We also conducted an exploratory factor analysis on all the items used to measure the eight first‐order constructs to rule out any significant cross‐loading across positivity and negativity dimensions. For the purpose of this analysis we forced the items to load onto two factors only. All the items measuring constructs with positive valence loaded onto the positivity factor and all the items measuring constructs with negative valence loaded onto the negativity factor.

11. This could partly be due to the way communication has been measured in the study. Some aspects of communication missing from the current measure may be relatively more effective at reducing negativity. We thank an anonymous reviewer for pointing this out.

Additional information

Notes on contributors

Bohyeon Kang

Bohyeon Kang is an associate professor of Marketing in the School of Business, Kyungpook National University.

Rupinder P. Jindal

Rupinder P. Jindal is an assistant professor of Marketing at the Milgard School of Business, University of Washington Tacoma.