A sustainable franchisor-franchisee relationship model: Toward the franchise win-win theory

In order for a franchise system to obtain long-term sustainability, balancing the benefits between franchisors and franchisees is critically important. In order to expand this area of research, this study reviewed prior franchise literature and then outlined what a healthy franchise system is. Further, this study also proposed a model for sustainable franchisor-franchisee relationships (SFFR), which supports the ‘franchise win-win theory.’ In developing a model, this study suggested that relationship quality is a vital part of a healthy relationship. This study also identified the three core components of a sustainable franchisor-franchisee relationship (i.e., satisfaction, trust, and commitment), as well as the antecedents and consequences of the relationship. This study conclusively suggested that franchisees are willing to continue their current franchise business only when they are satisfied with a franchisor’s fairness, autonomy, formalization, and support.