Trust in franchise relationships: An exploration of franchisee perspectives

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Heinrich, Ruthann
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Trust has a role in franchise relationships, which are characterized by legally separate, financially independent entities operating under a single brand. The strength of a franchise system is dependent on the participants overcoming their differing self-interests and the contractual imbalances of power to create value. Maintaining relationships that foster knowledge sharing through trust and collaboration promotes value. Lack of trust between parties hinders knowledge sharing, promotes opportunistic behavior, and damages the prospects of the system. This qualitative, experience-centered narrative inquiry explored franchisees' experiences of changes in trust during franchise relationships to lend insight into actions franchise leadership can take to reestablish trust, improve franchise relationships, and bolster the overall performance of the franchise system. The research questions centered on the events and actions that shaped franchisees' experiences of trust in a franchisor. Data were gathered through semi- structured interviews with franchisees purposefully selected from a single fitness franchise system. The participants' narratives were analyzed to gain an understanding of the overall themes of the whole, the meanings of the parts, and how they related to each other. Insights from franchisee perspectives yielded information to guide franchise leadership in overcoming the detrimental effects of lack of trust that impair the long-term prospects of the franchise system. The research yielded three recommendations for leadership to sustain or reestablish trust in the franchise relationship: (a) prioritize maintaining relationships, (b) act in good faith to meet expectations, and (c) obtain input and consider goal alignment to formulate new strategies, then provide adequate support for implementation.
franchise relationships , franchise trust , narrative inquiry , contractual balance