23

Click here to load reader

The Effect of Relationship Marketing Strategy on Franchise Channels

  • Upload
    yolanda

  • View
    225

  • Download
    1

Embed Size (px)

Citation preview

Page 1: The Effect of Relationship Marketing Strategy on Franchise Channels

This article was downloaded by: [University of Cambridge]On: 20 December 2014, At: 12:05Publisher: RoutledgeInforma Ltd Registered in England and Wales Registered Number: 1072954Registered office: Mortimer House, 37-41 Mortimer Street, London W1T 3JH, UK

Journal of Marketing ChannelsPublication details, including instructions for authorsand subscription information:http://www.tandfonline.com/loi/wjmc20

The Effect of RelationshipMarketing Strategy on FranchiseChannelsVictoria Bordonaba-Juste a & Yolanda Polo-Redondo aa Faculty of Economics and Business Administration ,University of Zaragoza , SpainPublished online: 07 Sep 2008.

To cite this article: Victoria Bordonaba-Juste & Yolanda Polo-Redondo (2008) The Effectof Relationship Marketing Strategy on Franchise Channels, Journal of Marketing Channels,15:1, 71-91, DOI: 10.1080/10466690802081392

To link to this article: http://dx.doi.org/10.1080/10466690802081392

PLEASE SCROLL DOWN FOR ARTICLE

Taylor & Francis makes every effort to ensure the accuracy of all the information(the “Content”) contained in the publications on our platform. However, Taylor& Francis, our agents, and our licensors make no representations or warrantieswhatsoever as to the accuracy, completeness, or suitability for any purposeof the Content. Any opinions and views expressed in this publication are theopinions and views of the authors, and are not the views of or endorsed byTaylor & Francis. The accuracy of the Content should not be relied upon andshould be independently verified with primary sources of information. Taylor andFrancis shall not be liable for any losses, actions, claims, proceedings, demands,costs, expenses, damages, and other liabilities whatsoever or howsoever causedarising directly or indirectly in connection with, in relation to or arising out ofthe use of the Content.

This article may be used for research, teaching, and private study purposes.Any substantial or systematic reproduction, redistribution, reselling, loan, sub-

Page 2: The Effect of Relationship Marketing Strategy on Franchise Channels

licensing, systematic supply, or distribution in any form to anyone is expresslyforbidden. Terms & Conditions of access and use can be found at http://www.tandfonline.com/page/terms-and-conditions

Dow

nloa

ded

by [

Uni

vers

ity o

f C

ambr

idge

] at

12:

05 2

0 D

ecem

ber

2014

Page 3: The Effect of Relationship Marketing Strategy on Franchise Channels

The Effect of RelationshipMarketing Strategy

on Franchise Channels:Evidence from Spanish Franchisees

Victoria Bordonaba-JusteYolanda Polo-Redondo

ABSTRACT. Commitment and satisfaction in business-to-businessrelationships have a great interest from a marketing perspective (Abdul-Muhmin, 2005). However, there is little relationship marketing researchon franchising to determine the key drivers of franchisee performance(Chiou, Hsieh, & Yang, 2004; García, Sanzo, & Trespalacios, 2005).Therefore, we analyse the influence of relational norms and interdepen-dence structure between franchisor and franchisee on commitment andthe effect of these three variables on franchisee satisfaction. Data comefrom a survey of 102 franchisees operating in the Spanish franchise sec-tor. Franchisee satisfaction is partially explained by the development of

Victoria Bordonaba-Juste (E-mail: [email protected]) is Assistant Professor ofMarketing, and Yolanda Polo-Redondo (E-mail: [email protected]) is Professor of Mar-keting, Faculty of Economics and Business Administration, University of Zaragoza, Spain.

Address correspondence to: Victoria Bordonaba-Juste, Faculty of Economics andBusiness Administration, University of Zaragoza, Gran Vía, 2, 50005 Zaragoza, Spain.

The authors wish to express their gratitude for the financial help received from theregional Government of Spain through the GENERES project (S09 and PM0262/2006),and from the National Science and Technology Department by means of the CICYTproject (SEJ2005 - 05968/ECON).

Journal of Marketing Channels, Vol. 15(1) 2008Available online at http://jmc.haworthpress.com

© 200 by The Haworth Press. All rights reserved.71

8doi:10.1080/10466690802081392

Dow

nloa

ded

by [

Uni

vers

ity o

f C

ambr

idge

] at

12:

05 2

0 D

ecem

ber

2014

Page 4: The Effect of Relationship Marketing Strategy on Franchise Channels

relational norms, commitment, and strong interdependence betweenfranchisor and franchisee. [Article copies avail-able for a fee from The Haworth Document Delivery Service: 1-800-HAWORTH.E-mail address: <[email protected]> Website: <http://www.HaworthPress.com> © 2008 by The Haworth Press. All rights reserved.]

KEYWORDS. Franchising, franchisee satisfaction, relational exchangetheory, interdependence

INTRODUCTION

The presence of new governance forms has rekindled academic interestin examining exchange relationships in the management of distributionchannels. Among the hybrid governance forms, franchising is high-lighted because of its expansion among entrepreneurs in recent years.Franchise channels can be described as systems of interdependent orga-nizations that are involved in the process of making a product or serviceavailable to the consumer through negotiation and exchange. In spite oftheir legal autonomy, participants in franchise systems are commerciallyand economically interdependent (Parsa, 1999), although franchisees areusually more dependent on their franchisor.

The retail franchise channel has experienced substantial growth andsignificant success in the last decade. Franchising in the U.S. includes1,500 different brands and generates an economic output of over U.S.$1.53 trillion (IFA, 2004). Though more prevalent in the U.S., franchisinghas become increasingly popular in Europe, with 5,637 franchise brandsoperating in 20 European countries particularly in France, Germany, theUnited Kingdom (UK) and Spain. Approximately 265,943 franchiseeoutlets exist in Europe. In France, franchising is well established with765 franchise brands, while 620 franchisors operate in Germany. In theUK, one-third of the retail and service brands are franchised businesses(EFF, 2004) comprising 718 franchises in 2004 with annual sales of £9.1billion (Natwest, 2005). Within Spain, the context of our study, the fran-chising sector continues to grow at approximately 18 percent (EFF, 2004).In 2004, 650 franchisors operated in the Spanish market, with sales of14 billion Euros or 10 percent of all retail sales (Spanish FranchisorsAssociation, 2005).

Although resource scarcity and agency theory have been the two maintheories used to explain franchising (Combs, Michael, & Castrogiovanni,2004), it is also relevant to examine franchising from a marketing

72 JOURNAL OF MARKETING CHANNELS

doi:10.1080/10466690802081392

Dow

nloa

ded

by [

Uni

vers

ity o

f C

ambr

idge

] at

12:

05 2

0 D

ecem

ber

2014

Page 5: The Effect of Relationship Marketing Strategy on Franchise Channels

perspective. Relational exchange theory (Macneil, 1980) proposes acontinuum between discrete transactions and relational exchanges sug-gesting that the norms that govern commercial exchange behavior aremarkedly different across continuum (Kaufmann & Stern, 1988). As-pects of relationalism can distinguish various hybrid forms of governance(Noordeweir, John, & Nevin, 1990). Franchising has been identified asa type of relational exchange (Kaufmann & Stern, 1988; McIntyre,Young, & Gilbert, 1997). Therefore, relational exchange theory pro-vides a theoretical framework to measure the stability of the franchi-see-franchisor relationship (Spinelli & Birley, 1996). Satisfaction of thefranchisee with the relational exchange is integral to the relationshipcontinuity (Frazier, Gill, & Kale, 1989).

Relational exchanges involve long-term, continuous, and complex re-lationships and are built on commitment, trust, common goals, commu-nication, and cooperation (Morgan & Hunt, 1994). The use of relationshipmarketing represented a shift in the axioms of marketing (Sheth &Parvatiyar, 1995): (1) from competition and conflict to mutual coopera-tion and (2) from choice independence to mutual interdependence. Theparadigm shift resulted in the examination of franchising from a strategicalliance perspective (McIntyre, Young, & Gilbert, 1997).

From a relationship marketing point of view, a focus on symmetricaldependence structures is emphasized for long-term continuity of relation-ships. However, in practice, there are successful long-term relationshipsin which one party is more powerful than the others (Hingley, 2005). Forexample, suppliers may tolerate the imbalance of power in order to main-tain successful business (Gummesson, 1996).

While there is recent interest in examining the application of rela-tionship marketing strategies from the franchisor’s perspective (Perry,Cavaye, & Coote, 2002; Doherty & Alexander, 2004), there is little re-search from the franchisees’ point of view (Chiou, Hsieh, & Yang, 2004;García-Rodríguez, Sanzo-Pére, & Trespalacios-Gutiérrez, 2005). Pastempirical studies examine trust, communication, perceived cooperation,and conflict. Additional factors, however, need to be analyzed in orderto overcome the lack of empirical evidences. For example, commitmentis considered to be a requirement of the new governance structures(Hingley, 2005). Therefore, we analyze whether two relational factors(norms and commitment) and the interdependence of channel membersare key elements for franchising success from a franchisee perspective.

The paper first introduces the conceptual framework and hypotheses.We then describe the data collection procedures and methodology in-cluding the operationalization of commitment, relational norms, and

Victoria Bordonaba-Juste and Yolanda Polo-Redondo 73

Dow

nloa

ded

by [

Uni

vers

ity o

f C

ambr

idge

] at

12:

05 2

0 D

ecem

ber

2014

Page 6: The Effect of Relationship Marketing Strategy on Franchise Channels

interdependence structure. Results are presented and conclusions aremade with relevance to managerial implications for practitioners.

CONCEPTUAL FRAMEWORK

Commitment is considered in marketing literature as an important el-ement for the success of long-term relationships (Morgan & Hunt, 1994;Jap & Ganesan, 2000). It involves an exchange party’s willingness toremain in, and safeguard a valued relationship (Abdul-Muhmin, 2005).Commitment has been defined as a belief, desire, intention, promise, orpositive attitude to continue the relationship (Morgan & Hunt, 1994;Kumar, Scheer, & Steenkamp, 1995; Jap & Ganesan, 2000).

Research has investigated the antecedents and consequences of com-mitment (Lothia et al., 2005). For example, total interdependence (Kumar,Scheer, & Steenkamp, 1995; Geyskens et al., 1996; Kim & Hsieh, 2003;Van Bruggen, Kacker, & Nieuwlaat, 2005), asymmetry of interdepen-dence (Kumar, Scheer, & Steenkamp, 1995; Geyskens et al., 1996), andrelational norms (Jap & Ganesan, 2000) have been identified as key an-tecedents of commitment. Satisfaction has been considered as a key out-come of commitment (Mohr & Spekman, 1994; Siguaw, Simpson, &Baker, 1998; Jap & Ganesan, 2000). Regarding franchise relationshipsas strategic alliances, they comprise commitment, interdependence, andflexibility in planning, among other alliance dimensions that enhancesatisfaction of both parties and the success of the franchisor-franchiseerelationship (McIntyre, Young, & Gilbert, 1997).

Recent empirical research has suggested that some behavioral factorslike relational norms and commitment are useful to protect specific as-sets invested in the relationship and make the relationship successful inthe long term (Jap & Ganesan, 2000). In franchise channels, franchiseesare the most dependent party, so they are the ones who have most to loseif the franchise contract is not renewed or the franchisor annuls it. In thissense, a franchisee has invested a large number of specific resources inthe relationship with its franchisor (franchise fees, initial investment,royalties, human resources, etc.) that would be sunk costs if the relation-ship finished.

For this reason, when franchisees perceive that both parties are be-having with solidarity and exchanging useful information, they are pro-tecting those specific assets through the development of commitment totheir franchisor. We have developed a model as shown in Figure 1 thatdepicts the influence of the interdependence structure and relational

74 JOURNAL OF MARKETING CHANNELS

Dow

nloa

ded

by [

Uni

vers

ity o

f C

ambr

idge

] at

12:

05 2

0 D

ecem

ber

2014

Page 7: The Effect of Relationship Marketing Strategy on Franchise Channels

norms on commitment as well as the impact of these three variables onfranchisee satisfaction.

Antecedents of Commitment

Interdependence structure. Dependence is defined as the extent towhich there are no equivalents or better alternatives available in the mar-ket (Heide & John, 1988) and it is considered as one of the main determi-nants of relationship maintenance (Hingley, 2005). Bilateral dependenceor interdependence is recognized from a marketing perspective. Inter-dependence reflects the degree to which both sides of a relationship aremutually dependent (Kumar, Scheer, & Steenkamp, 1995). The interde-pendence structure has two dimensions: total interdependence and in-terdependence asymmetry. Therefore, the interdependence structure ofa dyadic relationship refers to the magnitude and symmetry of the twopartners’ interdependence (Eyuboglu, Ryu, & Tellefsen, 2003). Inter-dependence asymmetry exists when the firm and its partner are differ-ently dependent on each other (Kumar, Scheer, & Steenkamp, 1995).

Interdependence between the parties of a relationship is needed for atrue commitment between them (Andaleeb, 1996). Commitment emergeswhen the interdependence between partners increases (Kim & Hsieh,2003) as the interests of channel members are more convergent (Kumar,Scheer, & Steenkamp, 1995; Geyskens et al., 1996). When the interde-pendence is high, the risk of opportunistic behaviors is less because bothpartners receive value from each other and desire to continue the rela-tionship (Buchanan, 1992). On the contrary, exchange relationships

Victoria Bordonaba-Juste and Yolanda Polo-Redondo 75

FIGURE 1. Conceptual Model

Dow

nloa

ded

by [

Uni

vers

ity o

f C

ambr

idge

] at

12:

05 2

0 D

ecem

ber

2014

Page 8: The Effect of Relationship Marketing Strategy on Franchise Channels

characterized by low levels of total interdependence do not requirecommitment for development (Buchanan, 1992; Van Bruggen, Kacker,& Nieuwlaat, 2005).

The implications of dependence asymmetry have been debated froma marketing perspective. Although some research has considered thatasymmetrical relationships are characterized by greater relational out-comes for all partners (Frazier, 1999), mainstream research suggests thatthe presence of asymmetry increases the level of conflict for all parties.Partners of relationships that are asymmetrical in dependence use coer-cive influence strategies or distributive conflict resolution strategies(Dant & Schul, 1992). Therefore, the presence of asymmetry often in-creases channel conflicts and inhibits the development of commitment(Kumar, Scheer, & Steenkamp, 1995).

Since the franchisee operates substantially under the trade name andmarketing plan of the franchise system, the dependence of the franchiseeupon the franchisor seems obvious. The franchisor is dependent upon thefranchisee for royalties, franchising, and advertising fees, as well as newproduct ideas and local marketing conditions and culture (McIntyre,Young, & Gilbert, 1997).

When the asymmetry is high, channel members’ interest is more di-vergent and the risk of opportunistic behavior is more probable (Jap &Ganesan, 2000). The most powerful firm has little motivation to developa long-term relationship (Lusch & Brown, 1996) and uses its power toobtain what it desires. As a result, commitment to the partner is difficultto develop (Kumar, Scheer, & Steenkamp, 1995). Therefore:

H1: Total interdependence has a positive direct effect on franchiseecommitment.H2: Interdependence asymmetry has a negative direct effect onfranchisee commitment.

Development of relational norms. Relational exchange theory devel-ops the argument that relational norms are the only class of governancemechanism that serves to promote commitment in exchange relationships(Macneil, 1980; Morgan & Hunt, 1994). Relational norms are expecta-tions of behaviors shared by partners to obtain mutual benefits and thedesire to enhance their mutual well-being (Macneil, 1980), and prescribebehaviors directed toward relationship maintenance (Jap & Ganesan,2000).

Relational norms have a multidimensional nature; however, there is noagreement in the literature on their number and content (Ivens & Blois,

76 JOURNAL OF MARKETING CHANNELS

Dow

nloa

ded

by [

Uni

vers

ity o

f C

ambr

idge

] at

12:

05 2

0 D

ecem

ber

2014

Page 9: The Effect of Relationship Marketing Strategy on Franchise Channels

2004). Most studies focused on relational norms obtain significant results(Heide & John, 1992; Lusch & Brown, 1996). This is due to the fact thatrelational norms may generate different dimensions depending on thecontext being studied.

We have analyzed two dimensions of relational norms in a franchisesetting: information exchange and solidarity. Given the ongoing natureof franchise relationships, the norm of solidarity includes behaviors thatpartners carry out jointly to preserve the relationship. The norm of in-formation exchange reflects the bilateral expectation that useful infor-mation is provided to the other party (Heide & John, 1992).

Franchise systems can have high levels of solidarity because of theinterdependence needed for success (McIntyre, Young, & Gilbert, 1997).In addition, franchise advisory councils encourage communication toand from franchisees and facilitate the sharing of information relating tomarketing issues (McIntyre, Young, & Gilbert, 1997).

When a relationship is characterized by relational norms, its mem-bers develop strategies to maintain it in the long term (Heide & John,1992). Thus, channel members may boost their commitment to partnersthrough relational norms (Jap & Ganesan, 2000). Therefore:

H3: Relational norms have a positive direct effect on franchiseecommitment.

Antecedents of Satisfaction

In exchange relationships characterized by high levels of total inter-dependence, exit barriers are higher and partners’ interests are moreconvergent. Therefore, partners desire to maintain and strengthen therelationship (Kumar, Scheer, & Steenkamp, 1995) and the ensuing co-operation and joint actions between the partners increase their satisfac-tion with the relationship (Van Bruggen, Kacker, & Nieuwlaat, 2005).However, situations of great asymmetry involve hostile environmentsfor the development of commitment and partners have more reasons tocome into conflict (Kumar, Scheer, & Steenkamp, 1995; Van Bruggen,Kacker, & Nieuwlaat, 2005), with a decrease in satisfaction levels(Lusch & Brown, 1996; Miles, Preece, & Baetz, 1999).

When a business relationship is guided by norms such as informa-tion exchange and solidarity, a close partnership develops between thefirms that can enhance their performance (Noordewier, John, & Nevin,1990). Marketing research has suggested that relational norms increase

Victoria Bordonaba-Juste and Yolanda Polo-Redondo 77

Dow

nloa

ded

by [

Uni

vers

ity o

f C

ambr

idge

] at

12:

05 2

0 D

ecem

ber

2014

Page 10: The Effect of Relationship Marketing Strategy on Franchise Channels

exchange performance, focused on satisfaction as a measurement ofefficiency (Poppo & Zenger, 2002).

A deficiency in relational norms leaves the exchange under-safe-guarded, in such a way that performance can suffer. The exchange ofrelevant and adequate information is a necessary ingredient to reachmutual objectives and, hence, satisfaction is achieved (Mohr & Spekman,1994). Therefore, communication between franchisors and franchiseesimproves franchisees’ satisfaction (Chiou, Hsieh, & Yang, 2004). Co-ordination between exchange partners produces partners’ perception thatboth individual and mutual objectives may be reached and problems canbe solved more easily; thus, parties are more satisfied (Anderson & Narus,1990). As solidarity is developed and the relationship is maintained overtime, exchange partners do not look for alternative partners and achievesatisfaction with the relationship (Dwyer, Schurr, & Oh, 1987). Therefore:

H4: Total interdependence has a positive direct effect on franchiseesatisfaction.H5: As the interdependence asymmetry increases, franchisee satis-faction decreases.H6: Relational norms have a positive direct effect on franchiseesatisfaction.

Historically, the typical franchise contract length is approximately15 years or more (Padmanabhan, 1988). Although the contract documentrepresents a legal commitment, it does not necessarily indicate a rela-tional commitment. The influence of commitment on satisfaction hasbeen studied in the marketing literature (Siguaw, Simpson, & Baker,1998; Jap & Ganesan, 2000) since the greater the commitment betweenpartners, the more easily both parties of the relationship will be able toreach their mutual objectives and, thereby achieve, satisfaction (Mohr &Spekman, 1994). Thus:

H7: Franchisee commitment has a positive direct effect on franchi-see satisfaction.

METHODOLOGY

Sample and Data Collection Procedure

The conceptual model was tested using data collected from a nationalsurvey of franchisees operating in the Spanish franchised distribution

78 JOURNAL OF MARKETING CHANNELS

Dow

nloa

ded

by [

Uni

vers

ity o

f C

ambr

idge

] at

12:

05 2

0 D

ecem

ber

2014

Page 11: The Effect of Relationship Marketing Strategy on Franchise Channels

system. Due to the absence of a database of franchisees in Spain, weelaborated our own database with information provided by franchisors.1

A questionnaire in Spanish was sent to 600 randomly selected fran-chisees and a sample of 102 franchisees was obtained (a response rate of17 percent). Of these, 28.3 percent of franchisees operated in personalservices, 33.2 percent in specialized services (travel agencies, consultancy,health centres, education, restaurants, estate agencies, leisure parks, ad-vertising agencies, financial services, dry-cleaners, transports, and di-verse services), and 38.3 percent of franchisees operated in retailing(furniture, computing, fashion, bakery, and stationery).

To investigate representativeness, following Castrogiovanni, Combs,and Justis (2006), we compared the sample with the aggregate data offranchisees provided by the Spanish Franchisor Association. Industrydifferences were not significant. In addition, because the level of formal-ity of relationships between franchisors and franchisees varies from oneindustry to another, we include a sectoral variable to control for sectoraleffects (Windsperger, 2004). The coefficient of the sectoral variable isnot significant.

Measurement Development

The measures were developed based on a review of the marketing lit-erature and were adapted to a franchising context. Relational norms aredefined as a second order construct consisting of two dimensions: infor-mation exchange and solidarity. Information exchange measures the bi-lateral partners’ expectations to provide useful information to theirpartner (Heide & John, 1992; Lusch & Brown, 1996; Jap & Ganesan,2000). Solidarity measures the bilateral expectation that a high value isplaced on the relationship and it prescribes behaviors directed towardpreserving the relationship (Heide & John, 1992; Lusch & Brown,1996; Jap & Ganesan, 2000).

Total interdependence is calculated as the sum of the franchisor’s andthe franchisee’s dependence (Kumar, Scheer, & Steenkamp, 1995; Li &Dant, 2001; Kim & Hsieh, 2003). We focus on the partner firm’s re-placeability to measure dependence using one item employed by Heideand John (1988), Dant and Schul (1992), Kumar, Scheer, and Steenkamp(1995), Lusch and Brown (1996), and Kim and Hsieh (2003). The re-placeability component of dependence reflects the difficulty of substitutingthe partner (Geyskens et al., 1996). Interdependence asymmetry is calcu-lated as the absolute value of the difference between the franchisee’s

Victoria Bordonaba-Juste and Yolanda Polo-Redondo 79

Dow

nloa

ded

by [

Uni

vers

ity o

f C

ambr

idge

] at

12:

05 2

0 D

ecem

ber

2014

Page 12: The Effect of Relationship Marketing Strategy on Franchise Channels

dependence and the franchisor’s dependence (Kumar, Scheer, & Steenkamp,1995; Li & Dant, 2001; Kim & Hsieh, 2003).

The scale of commitment includes a strong sense of loyalty, willing-ness to invest in the relationship, willingness to make sacrifices toachieve long-term benefits and treating the relationship as a long-termalliance. It has been measured as a global scale (Kumar, Scheer, &Steenkamp, 1995; Siguaw, Simpson, & Baker, 1998; Jap & Ganesan,2000). Satisfaction measures the franchisee’s global satisfaction withthe relationship (Andaleeb, 1996). Satisfaction has been considered anindicator of partnership success (Mohr & Spekman, 1994). The means,standard deviations, and construct correlations are shown in Table 1.

The set of items is subjected to confirmatory factor analysis (CFA) toassess factor unidimensionality and validity (Anderson & Gerbing,1988). According to previous studies (Jap & Ganesan, 2000; Chiou,Hsieh, & Yang, 2004), convergent and discriminant validity is assessedthrough two CFA models: separate CFA were conducted for exogenousand endogenous variables. The findings provide evidence of conver-gent validity of the measures since all the items present high and statis-tically significant factor loadings and high reliability (Anderson &Gerbing, 1988; Hair et al., 1995). Discriminant validity between theconstructs was supported using two methods. First, none of the 95 per-cent confidence intervals around the estimates of correlations betweenthe latent constructs included 1 (Hair et al., 1995). Second, a series ofmodel comparisons assessed whether differences existed when correla-tions between the latent constructs were constrained to 1 (Anderson &Gerbing, 1988; Steenkamp & van Trijp, 1991). Chi-square differencetests were significant.

The overall fit is acceptable because the overall, incremental and parsi-mony fit indexes were above the recommended levels (Hair et al., 1995).The results of the confirmatory factor analysis are shown in Table 2. Allthe scales showed a composite reliability coefficient over 0.7 and anAverage Variance Extracted (AVE) over the recommended level of 0.5(Hair et al., 1995), which indicates the reliability of the measures.

A second-order factor analysis is estimated to examine whether thetwo factor solution was the best measurement model for relational norms.The second-order factor structure provided the best fit (CFI = 0.972, IFI =0.973, GFI = 0.952, RMSR = 0.044) and the first-order factor loadingson the second-order factor are high and significant (information ex-change: �1 = 0.841, T-value > 1.96, R2 = 0.706; solidarity: �2 = 0.998,T-value > 1.96, R2 = 0.995).

80 JOURNAL OF MARKETING CHANNELS

Dow

nloa

ded

by [

Uni

vers

ity o

f C

ambr

idge

] at

12:

05 2

0 D

ecem

ber

2014

Page 13: The Effect of Relationship Marketing Strategy on Franchise Channels

TA

BLE

1.M

eans

,Sta

ndar

dD

evia

tions

,and

Cor

rela

tion

Mat

rix

Mea

nS

tand

ard

Dev

iatio

nR

elia

bilit

yIn

form

atio

nS

olid

arity

Inte

rdep

ende

nce

Asy

mm

etry

Com

mitm

ent

Info

rmat

ion

5.34

1.54

0.80

52

Sol

idar

ity4.

821.

380.

7957

0.64

7

Inte

rdep

ende

nce

8.51

2.15

0.85

100.

327

0.08

5

Asy

mm

etry

1.63

1.31

0.85

20�

0.17

7�

0.14

1�

0.13

5

Com

mitm

ent

4.93

1.54

0.87

150.

664

0.49

40.

596

�0.

190

Sat

isfa

ctio

n4.

791.

660.

8715

0.68

00.

736

0.32

9�

0.23

80.

779

81

Dow

nloa

ded

by [

Uni

vers

ity o

f C

ambr

idge

] at

12:

05 2

0 D

ecem

ber

2014

Page 14: The Effect of Relationship Marketing Strategy on Franchise Channels

82 JOURNAL OF MARKETING CHANNELS

TABLE 2. Confirmatory Factor Analysis

Item Loading T-Student Fit

Franchisee Dependence Model ofexogenousvariables

c2 Sat = 25.74p = 0.17466NNFI = 0.87CFI = 0.96IFI = 0.90GFI = 0.90RMSR = 0.09

It would be difficult for us to replacethis franchisor

0.922*** 21.228

Franchisor Dependence

It would be difficult for this franchisorto replace us

0.923*** 20.412

Information Exchange

In this relationship, it is expected thatany information that might help the otherparty will be provided to them

0.847*** 7.224

Exchange of information in this relationshiptakes place frequently and informally,and not only according to a prespecifiedagreement

0.682*** 7.070

It is expected that we kept each otherinformed about events or changes thatmay affect the other party

0.802*** 6.808

Solidarity

Problems that arise in the course of therelationship are treated by both firms asjoint rather than individual responsibilities

0.666*** 7.014

Both firms are open to improvements thatmay benefit the relationship as a wholeand not only the individual parties

0.776*** 6.931

Both firms do not mind owing eachother favors

0.833*** 6.728

Commitment Model ofendogenousvariables

c2 Sat = 22.57p = 0.09365NNFI = 0.90CFI = 0.98IFI = 0.89GFI = 0.94RMSR = 0.10

We defend the franchisor when outsiderscriticize the company

0.738*** 9.626

We are very committed to franchisor 0.790*** 10.337

We are quite willing to dedicate whateverpeople and resources it takes to growcompany’s sales

0.820*** 10.581

The relationship with the franchisor canbe defined as a long-term alliance

0.812*** 10.392

Satisfaction

The relationship with the franchisor seemsto reflect a happy situation

0.585*** 10.748

The relationship with the franchisor isvery positive

0.865*** 12.591

We are very satisfied with the franchisor 0.738*** 9.372

Note: The anchors for all items are 1 = Strongly disagree to 7 = Strongly agree.***Significant at 1%.

Dow

nloa

ded

by [

Uni

vers

ity o

f C

ambr

idge

] at

12:

05 2

0 D

ecem

ber

2014

Page 15: The Effect of Relationship Marketing Strategy on Franchise Channels

RESULTS

Following previous studies with a small sample size (Hewett, Money,& Sharma, 2002; Chiou, Hsieh, & Yang, 2004), we use a path analysisto test the hypotheses. The path analysis was specified using structuralequations modeling methodology. A summary of the results is shown inTable 3.

Victoria Bordonaba-Juste and Yolanda Polo-Redondo 83

TABLE 3. Results

StandardizedPath

Coefficient

T-Value Hypothesis Goodness of Fit

Hypothesis Conceptual ModelTotalInterdependence �Commitment

0.238** 2.164 H1: Significant c2 = 10.533 (8);p = 0.22959;c2 Satorra = 11.0185;p = 0.20065NFI = 0.945,NNFI = 0.973CFI = 0.986,CFI Robust = 0.982IFI = 0.986MFI = 0.988GFI = 0.968AGFI = 0.915RMSR = 0.058RMSEA = 0.057

AsymmetricInterdependence �Commitment

�0.091 �0.916 H2: Non significant

Relational norms �Commitment

0.694*** 6.040 H3: Significant

TotalInterdependence �Satisfaction

0.178** 2.232 H4: Significant

AsymmetricInterdependence �Satisfaction

�0.027 �0.381 H5: Non significant

Relational norms �Satisfaction

0.653*** 4.364 H6: Significant

Commitment �Satisfaction

0.310* 1.897 H7: SignificantR2 satisfaction = 0.893

Rival modelTotalInterdependence �Satisfaction

0.184** 2.194 Significant c2 = 50.948 (12);p � 0.001;c2 Satorra = 52.5271;p = 0.00000NFI = 0.733,NNFI = 0.723CFI = 0.778,CFI Robust = 0.754IFI = 0.782MFI = 0.826GFI = 0.871AGFI = 0.775RMSR = 0.202RMSEA = 0.180

AsymmetricInterdependence �Satisfaction

�0.029 0.382 Non significant

Relational norms �Satisfaction

0.631*** 6.233 Significant

Commitment �Satisfaction

0.602*** 6.092 SignificantR2 satisfaction = 0.796

***Significant at 1%, **significant at 5%, *significant at 10%.

Dow

nloa

ded

by [

Uni

vers

ity o

f C

ambr

idge

] at

12:

05 2

0 D

ecem

ber

2014

Page 16: The Effect of Relationship Marketing Strategy on Franchise Channels

As H1 predicted, total interdependence increases franchisee commit-ment (0.238, p < 0.05); but, the presence of asymmetry between a fran-chisee and its franchisor does not influence commitment, so H2 is notsupported (–0.091, p > 0.10). The development of relational norms togovern the relationship is positively associated with greater franchiseecommitment to its franchisor (0.694, p < 0.01); thus, H3 is fulfilled.

Franchisee satisfaction is influenced positively by the total interde-pendence between franchisor and franchisee (0.178, p < 0.05), the de-velopment of relational norms (0.653, p < 0.01) and commitment (0.310,p < 0.10). Hence, H4, H6, and H7 are supported. However, interdepen-dence asymmetry does not affect franchisee satisfaction (–0.027, p >0.10). Therefore, H5 is not supported empirically.

The results suggest that commitment has a mediating role in determin-ing organizational outcomes (Morgan & Hunt, 1994; Andaleeb, 1996;Siguaw, Simpson, & Baker, 1998; Garbarino & Johnson, 1999). The re-sults indicate that the essential variables to promote franchisee commit-ment (R2 commitment = 0.547) are, first, the development of relationalnorms (the direct effect of norms on commitment is 0.694) and, second,the existence of a high interdependence in the relationship (the directeffect of interdependence on commitment is 0.238). Solidarity and in-formation exchange between franchisor and franchisees are the mostimportant mechanisms to manage the franchise relationship and to in-crease satisfaction (R2 satisfaction = 0.893). The total effect of normson satisfaction is 0.868 (0.653 direct effect and 0.215 indirect effect).Moreover, satisfaction is also achieved through the development ofcommitment (the total effect of commitment on satisfaction is 0.310)and by increasing the level of bilateral dependence (the total effect of in-terdependence on satisfaction is 0.251).

We have compared the proposed model with a rival model wherecommitment does not have a mediating role but, instead, is another an-tecedent of satisfaction together with interdependence and relationalnorms. The criteria followed to compare both models are their overallfit, their significant paths and the percentage of the variance explained(Morgan & Hunt, 1994).

The results show that the model with commitment as a mediatingvariable presents a better overall fit and a greater percentage of the vari-ance explained of satisfaction than the rival model. Moreover, most ofthe hypotheses proposed are accepted and the model shows an excellentfit. Thus, the model suggested in this paper is suitable for analyzing theeffects of these three variables (norms, interdependence structure, andcommitment) on satisfaction. The coefficients for industry dummies are

84 JOURNAL OF MARKETING CHANNELS

Dow

nloa

ded

by [

Uni

vers

ity o

f C

ambr

idge

] at

12:

05 2

0 D

ecem

ber

2014

Page 17: The Effect of Relationship Marketing Strategy on Franchise Channels

not statistically significant, showing that the type of activity of thefranchisee is not relevant in its performance.

DISCUSSION

From a marketing perspective, we have investigated the managementof a hybrid governance form. This paper studies the application of rela-tionship marketing strategies in franchising, specifically, the role of com-mitment in franchising success. The model suggested examines howrelational norms and the interdependence of channel members affectcommitment and satisfaction. The results suggest that franchisee satisfac-tion is mainly explained by the development of norms, commitment, anda strong interdependence between parties. Therefore, this study suggeststhat, for franchise success, it is necessary for both parties to have mutualobjectives that include commitment, information exchange, and coopera-tion (Spinelli & Birley, 1996).

The results also suggest that, in franchising, commitment is mainlyreached by the development of relational norms between franchisor andfranchisee and it is also influenced by the level of total interdependencebetween them. In this respect, franchise channels are characterized by aparticipative communication facilitated by the franchisor in order to worktogether with franchisees to obtain mutual objectives. This participativecommunication promotes the convergence of interests, gives both partiesa favorable perception of the relationship and promotes trust, which, atthe same time, improves the commitment to the relationship. Franchiseesgenerally have a close relationship with franchisors, which may facilitatecommunication in the network. Moreover, franchise channels are charac-terized by solidarity (Strutton, Pelton, & Lumpkin, 1995), since the mem-bers of a franchise relationship obtain benefits with the union of systemsin the channel.

Franchise channel participants are interdependent on one another’sobjectives and performance to achieve their goals (Pappu & Strutton,2001). The balance of dependence between the franchisor and franchi-see is a key aspect in managing franchise relationships. Interdependencemay be perceived by a franchisee in a different way than by his franchisor.The franchisor generally exercises control over the franchisees, but thiscan be reduced by a legal contract. The legal relationship between thefranchisor and franchisee is the cornerstone on which this system isbased. Nevertheless, franchising includes not only a legal, but also busi-ness and cooperation relationships. This is due to the fact that franchise

Victoria Bordonaba-Juste and Yolanda Polo-Redondo 85

Dow

nloa

ded

by [

Uni

vers

ity o

f C

ambr

idge

] at

12:

05 2

0 D

ecem

ber

2014

Page 18: The Effect of Relationship Marketing Strategy on Franchise Channels

channel members often develop joint actions which are not specified inthe contract, because both parties perceive the mutual benefits derivedfrom them. The business relationship is necessary to provide customerswith products and services, while the cooperative relationship betweenthe franchisor and franchisee is necessary for channel success becauseboth parties have established a relationship based on commercial inter-dependence. Consequently, informal relationships between the franchisorand franchisee may be more important than the contractual aspect(Gassenheimer, Baucus, & Baucus, 1996). The relationship between thefranchisor and franchisee has been considered a model in which formal-ized contracts combine with the adoption of relational norms in order toobtain mutual benefits (Gassenheimer, Baucus, & Baucus, 1996).

We have shown that commitment is an essential variable for relation-ship success, since franchisees consider commitment as a key element forobtaining high-value results. Thus, they will make a great effort to achieveboth their own and the franchise company’s objectives and to establishand maintain their relationship with the franchisor over time. Neverthe-less, the development of relational norms, such as information exchangeand solidarity, is a more important mechanism than commitment formanaging relationships.

On the other hand, the coefficient of asymmetry of interdependenceis not statistically significant. However, the negative trend shows thatthe greater the asymmetry of interdependence, the lower the commit-ment and satisfaction achieved.

The main contributions emerging from this article are the following.First, the study of the factors of a relationship marketing strategy is es-pecially important for a franchise system (Chiou, Hsieh, & Yang, 2004).Although most of franchising research is based on scarce resource andagency theory (Combs, Michael, & Castrogiovanni, 2004), this researchexplains franchising success from a marketing perspective, which con-tributes with evidence to the business-to-business context.

Second, there are only a small number of studies that have empiricallyanalyzed the success of franchisees, examining other factors than thoseused in this paper (Parsa, 1999; Chiou, Hsieh, & Yang, 2004; Garciaet al., 2005). Therefore, this article contributes to the previous literaturewith a model that examines the influence of relational mechanisms anddependence structure on commitment and their influence on satisfaction.

Third, previous empirical research did not cover all sectors, but fo-cused on a specific one (Doherty & Alexander, 2004; Chiou, Hsieh, &Yang, 2004), which means that their results and conclusions may not beapplicable to other sectors. Thus, from an empirical point of view, our

86 JOURNAL OF MARKETING CHANNELS

Dow

nloa

ded

by [

Uni

vers

ity o

f C

ambr

idge

] at

12:

05 2

0 D

ecem

ber

2014

Page 19: The Effect of Relationship Marketing Strategy on Franchise Channels

sample is very relevant because it covers a great range of retailing andservice franchises; hence, we can generalize our results back to theSpanish franchise distribution system. Therefore, the conclusions inthis study should hold for other Spanish franchisees.

Future research could address the use of authoritative control (e.g.,formalization) or normative control mechanisms (e.g., trust) to guidemanagerial behavior and enhance relational outcomes. For example, wecould analyze whether trust mediates the relationship between depen-dence and satisfaction (Payan & McFarland, 2005).

LIMITATIONS OF THE STUDY

Like all research, this study may have some limitations, and theseshould be borne in mind when interpreting the results. Interdependencewas measured using data from franchisees only (Chiou, Hsieh, & Yang,2004). Data from both parties are necessary to examine the convergencebetween franchisor and franchisee perceptions. Given that the franchisor-side of the dyad was not included in the sample, most importantly, thereis no information in terms of actual relationship marketing efforts un-dertaken by the franchisors.

The results are also limited by the cross-sectional nature of the re-search. Longitudinal research is also necessary, considering the temporalaspect of commitment and the long-term development of relationships.

Managerial Implications

The managerial implications of the study are that franchisees makeefforts to increase performance. Our findings suggest that a franchiseeshould focus on building strong relational norms with its franchisor be-cause, the higher the level of relational norms existing between ex-change partners, the more significant the effect of these governancemechanisms on franchising success. This finding also emphasizes that,before establishing relational norms, a franchisor should first be sureabout the lack of alternatives for the future franchisees.

Franchisees can influence the level of relational norms by behavingwith solidarity and exchanging useful information with their partner. Fi-nally, franchisees must purchase inputs and equipment from the franchisor,provide a minimum level of service quality, and commit to their franchisorin order to manage their business successfully.

Victoria Bordonaba-Juste and Yolanda Polo-Redondo 87

Dow

nloa

ded

by [

Uni

vers

ity o

f C

ambr

idge

] at

12:

05 2

0 D

ecem

ber

2014

Page 20: The Effect of Relationship Marketing Strategy on Franchise Channels

Although in conventional channels, the two parties can assume to beequal, this is not the case in franchising. Franchisors have invested manyresources in their business model (know-how, human, economic, techno-logical resources, etc.). Therefore, they need to be very demanding. Thisarticle finds that the gains derived from control systems would benefitfranchise management. Managers might control diverse mechanisms,like the development of relational norms and the level of bilateral de-pendence.

The predictors identified for this study will also provide a useful toolfor franchising companies who wish to examine franchisee satisfaction.Once the franchisor understands the variables leading to franchisee sat-isfaction, changes can be implemented to reduce conflict and improvethe overall performance of the franchisee. The proposed model can alsobe used to develop the franchisor’s management strategy to improve therate of success of both franchisor and franchisee. Similarly, the modelcan help both the franchisor and the prospective franchisee to under-stand their policies in strategic terms and to integrate their activities soas to provide the firm with the quality relationship required for competi-tive advantage.

NOTE

1. We contacted franchisors through a directory from the National Industry Depart-ment (www.comercio.es) named Registro de Franquiciadores en España (SpanishFranchisor Register) and the Spanish Franchisor Association (www.franquiciadores.com).

REFERENCES

Abdul-Muhmin, A.G. (2005). Instrumental and interpersonal determinants of relation-ship satisfaction and commitment in industrial markets. Journal of Business Re-search 58 (5), 619-628.

Andaleeb, S.S. (1996). An experimental investigation of satisfaction and commitmentin marketing channels: the role of trust and dependence. Journal of Retailing 72 (1),77-93.

Anderson, J.C. & Gerbing, D.W. (1988). Structural modeling in practice: a review andrecommended two-step approach. Psychological Bulletin 103 (3), 411-423.

Anderson, J.C. & Narus, J.A. (1990). A model of distributor firm and marketing firmworking partnerships. Journal of Marketing 54 (January), 42-58.

88 JOURNAL OF MARKETING CHANNELS

Dow

nloa

ded

by [

Uni

vers

ity o

f C

ambr

idge

] at

12:

05 2

0 D

ecem

ber

2014

Page 21: The Effect of Relationship Marketing Strategy on Franchise Channels

Buchanan, L. (1992). Vertical trade relationships: the role of dependence and symmetryin attaining organizational goals. Journal of Marketing Research 29 (February),65-75.

Castrogiovanni, G. J., Combs, J. G. & Justis, R. T. (2006). Shifting imperatives: anintegrative view of resource scarcity and agency for franchising. EntrepreneurshipTheory and Practice 30 (1), 23-40.

Chiou, J., Hsieh, C. & Yang, C. (2004). The effect of franchisors’ communication,service assistance and competitive advantage on franchisees’ intentions to remainin the franchise system. Journal of Small Business Management 42 (1), 19-36.

Combs, J. G., Michael, S. C. & Castrogiovanni, G. J. (2004). Franchising: a review andavenues to greater theoretical diversity. Journal of Management 30 (6), 907-931.

Dant, R. P. & Schul, P. (1992). Conflict resolution processes in contractual channels ofdistribution. Journal of Marketing 56 (January), 38-54.

Doherty, A. M. & Alexander, N. (2004). Relationship development in international retailfranchising: case study evidence from the UK fashion sector. European Journal ofMarketing 38 (9/10), 1215-1235.

Dwyer, F. R., Schurr P. & Oh, S. (1987). Developing buyer-seller relationships. Journalof Marketing 51 (April), 11-27.

European Franchise Federation (2004).www.eff-franchise.com.Eyuboglu, N., Ryu, S. & Tellefsen, T. (2003). Current and future interdependence:

effects on channel relationships. Journal of Marketing Channels 11 (1), 3-26.Frazier, G. L. (1999). Organizing and managing channels of distribution. Journal of the

Academy of Marketing Science 27 (2), 226-240.Frazier. G. L., Gill, J. D. & Kale, S. H. (1989). Dealer dependence levels and reciprocal

actions in a channel of distribution in a developing country. Journal of Marketing53 (1), 50-69.

Garbarino, E. & Johnson, M. (1999). The different roles of satisfaction, trust andcommitmentin customer relationships. Journal of Marketing 63 (April), 70-87.

García-Rodríguez, N., Sanzo-Pére, M. J. & Trespalacios-Gutiérrez, J. A. (2005).Dependence as a moderator in the relationship between franchisors and franchisees:the case of services franchises. Journal of Marketing Channels 13 (2), 3-27.

Gassenheimer, J.B., Baucus, D. B. & Baucus, M. S. (1996). Cooperative arrangementsamong entrepreneurs: an analysis of opportunism and communication in franchisestructures. Journal of Business Research 36 (1), 67-79.

Geyskens, I., Steenkamp, J.B., Scheer, L. & Kumar, N. (1996). The effects of trust andinterdependence on relationship commitment: A trans-Atlantic study. InternationalJournal of Research in Marketing 13 (4), 303-317.

Gummesson, E. (1996). Relationship marketing and the imaginary organisation:a synthesis. European Journal of Marketing 30 (2), 31-44.

Hair, J. F., Anderson, R. E., Tatham, R. L. & Black, W. C. (1995). Multivariate dataanalysis. Englewood Cliffs, NJ: Prentice Hall.

Heide, J. B. & John, G. (1992). Do norms matter in marketing relationships? Journal ofMarketing 56 (April), 32-44.

Heide, J. B. & John, G. (1988). The role of dependence balancing in safeguard-ing transaction-specific assets in conventional channels. Journal of Marketing 52(January), 20-35.

Victoria Bordonaba-Juste and Yolanda Polo-Redondo 89

Dow

nloa

ded

by [

Uni

vers

ity o

f C

ambr

idge

] at

12:

05 2

0 D

ecem

ber

2014

Page 22: The Effect of Relationship Marketing Strategy on Franchise Channels

Hewett, K., Money, B. & Sharma, S. (2002). An exploration of the moderating role ofbuyer corporate culture in industrial buyer- seller relationships. Journal of the Acad-emy of Marketing Science 30 (3), 229-239.

Hingley, M. K. (2005). Power imbalanced relationships: cases from UK fresh food sup-ply. International Journal of Retail and Distribution Management 33 (8), 551-569.

International Franchise Association (2004). The impact of franchised businesses on theU.S. economy. www.franchise.org.

Ivens, B. S. & Blois, K. J. (2004). Relational exchange norms in marketing: a criticalreview of macneil’s contribution. Marketing Theory 4 (3), 239-263.

Jap, S. & Ganesan, S. (2000). Control mechanisms and the relationship life cycle:implications for safeguarding specific investments and developing commitment.Journal of Marketing Research 37 (May), 227-245.

Kaufmann, P. J. & Dant, R. P.(1992).The dimensions of commercial exchange.Marketing Letters 3 (2), 171-185.

Kaufmann, P. J. & Stern, L. W. (1988). Relational exchange norms, perceptions ofunfairness, and retained hostility in commercial litigation. The Journal of ConflictResolution 32 (3), 534-552.

Kim, S. & Hsieh, P. (2003). Interdependence and its consequences in distributor-supplier relationships: a distributor perspective through response surface approach.Journal of Marketing Research 40 (February), 101-112.

Kumar, N., Scheer, L. & Steenkamp, J.B. (1995). The effects of perceived interdepen-dence on dealer attitudes. Journal of Marketing Research 32 (August), 348-356.

Li, Z. G. & Dant, R. P. (2001). Channel interdependence: conceptual and operationalconsiderations. Journal of Marketing Channels 9 (1/2), 33-64.

Lohtia, R., Bello, D. C., Yarnada, T. & Gilliland.D. (2005) The role of commitment inforeign–Japanese relationships: mediating performance for foreign sellers in Japan.Journal of Business Research 58 (8) 1009-1018.

Lusch, R. & Brown, J. (1996). Interdependency, contracting, and relational behaviourin marketing channels. Journal of Marketing 60 (October), 19-38.

Macneil, I. (1980). The new social contract: An inquiry into modern contractual rela-tions. New Haven, CT: Yale University Press.

McIntyre, F. S., Young, J. A. & Gilbert, F.W. (1997). A strategic alliance perspective offranchise relationships. Franchising Research: An International Journal 2 (1), 6-14.

Miles, G., Preece, S. B. & Baetz, M.C. (1999). Dangers of dependence: the impact ofstrategic alliance use by small technology-based firms. Journal of Small BusinessManagement 37 (2), 20-29.

Mohr, J. & Spekman, R. (1994). Characteristics of partnership success: partnershipattributes, communications behaviour and conflict resolution techniques. StrategicManagement Journal 15 (2), 135-152.

Morgan, R. & Hunt, S. (1994). The commitment–trust theory of relationship marketing.Journal of Marketing 58 (July), 20-38.

NatWest (2005). The BFA franchise survey. www.natwest.com.Noordewier, T., John, G. & Nevin, J. (1990). Performance outcomes of purchasing

arrangements in industrial buyer-vendor relationships. Journal of Marketing 54(October), 80-93.

90 JOURNAL OF MARKETING CHANNELS

Dow

nloa

ded

by [

Uni

vers

ity o

f C

ambr

idge

] at

12:

05 2

0 D

ecem

ber

2014

Page 23: The Effect of Relationship Marketing Strategy on Franchise Channels

Padmanabhan, K. H. (1988). Channel control: do successful franchise systemsultimately become wholly-owned chains? The Journal of Midwest Marketing 3(Autumn), 17-36.

Parsa, H. G. (1999). Interaction of strategy implementation and power perceptions infranchise systems: an empirical investigation. Journal of Business Research 45 (2),173-185.

Payan, J. M. & McFarland, R. G. (2005). The effects of influence strategies anddependence on satisfaction: does trust mediate these relationships? Journal ofMarketing Channels 13 (1), 3-20.

Perry, C., Cavaye, A. & Coote, L. (2002). Technical and social bonds within business-to-business relationships. Journal of Business & Industrial Marketing 17 (1), 75-89.

Pappu, M. & Strutton, D. (2001). Toward an understanding of strategic inter-organiza-tional relationships in franchise channels. Journal of Marketing Channels 8 (1/2),111-132.

Poppo, L. & Zenger, T.R. (2002). Do formal contracts and relational governance func-tion as substitutes or complements? Strategic Management Journal 23 (8), 707-725.

Sheth, J. & Parvatiyar, A. (1995). The evolution of relationship marketing. Interna-tional Business Review 4, 397-418.

Siguaw, J., Simpson, P. & Baker, T. (1998). Effects of supplier market orientation ondistributor market orientation and the channel relationship: the distributor perspec-tive. Journal of Marketing 62 (July), 99-111.

Spinelli, S. & Birley, S. (1996). Toward a theory of conflict in the franchise system.Journal of Business Venturing 11 (5), 329-342.

Steenkamp, J.B. & van Trijp, H.C.M. (1991). The use of LISREL in validating Market-ing constructs. International Journal of Research in Marketing 8 (4), 283-299.

Strutton, D., Pelton, L. E. & Lumpkin, J. R. (1995). Psychological climate in franchisingsystem channels and franchisor-franchisee solidarity. Journal of Business Research34 (2), 81-91.

Van Bruggen, G. H., Kacker, M. & Nieuwlaat, C. (2005). The impact of channel func-tion performance on buyer-seller relationships in marketing channels. InternationalJournal of Research in Marketing 22 (2), 141-158.

Windsperger, J. (2004). Centralization of franchising networks: evidence from theAustrian franchise sector. Journal of Business Research 57 (12), 1361-1369.

Victoria Bordonaba-Juste and Yolanda Polo-Redondo 91

Dow

nloa

ded

by [

Uni

vers

ity o

f C

ambr

idge

] at

12:

05 2

0 D

ecem

ber

2014