The Determination of Trust in Franchisor-Franchisee Relationships in China (The Determination of Trust in Franchisor-Franchisee Relationships in China)

서지정보

· 발행기관 : 한국마케팅과학회
· 수록지 정보 : Journal of Global Scholars of Marketing Science(마케팅과학연구) / 18권 / 2호 / 59 ~ 80페이지
· 저자명 : 신건철, 마요곤

초록

Since the implementation of economic reforms in 1978, the Chinese economy grows
rapidly at an average annul growth rate of 9% over the post two decades. Franchising
has been widely recognized as an important source of entrepreneurial activity. Trust is
important in that it facilitates relational exchanges by permits partners to transcend
short-run inequities or risks to concentrate on long-term profits or gains. In the
relationship between the franchisors and franchisees, trust has been described as an
important source of competitive advantage. However, little research has been done on the
factors affecting trust in Chinese franchisor-franchisee relationships. The purpose of this
study is to investigate what factors affect the trust in the franchise system in China, and
to provide guidelines and insights to franchisors which enter Chinese market.
In this study, according to Morgan and Hunt (1994), trust is defined as the extending
when one party has confidence in an exchange partner's reliability and integrity. We
offered a conceptual model of the empirical study. The model shows that the factors
affecting the trust include franchisor's supports, communication, satisfaction with previous
outcome and conflict. We also suggested the franchisor's supports and communication
like to enhance the franchisee's satisfaction with previous outcome, and the franchisor's
supports, communication and he franchisee's satisfaction with previous outcome tend to
decrease conflict.
Before the formal study, a pretest involving exploratory interviews with owners from
three franchisees was conducted to make sure the questionnaire was relevant and clear to
the respondents. The data were collected using trained interviewers to carry out personal
interviews with the aid of an unidentified, muti-page, structured questionnaire. The
respondents comprised of owners, managers, and owner managers of franchisee-owned food service franchises located in Beijing, China. Even though a total of 256 potential
franchises were initially contacted, the finally usable sample consisted of 125 respondents.
As expected, the sampling method was successful in soliciting respondents with waried
personal and firm characteristics.
Self-administrated questionnaires were used for all measures. And established scales
were used to measure the latent constructs in this study. The measures tapped the
franchisees' perceptions of the relationship with the referent franchisor. Five-point
Likert-type scales ranging from “strongly disagree” (=1) to “strongly agree” (=7) were
used throughout the constructs (trust, eight items; support, five items; communication,
four items; satisfaction, six items; conflict, three items).
The reliability measurements traditionally employed, such as the Cronbach's alpha,
were used. All the reliabilities were greater than .80. The proposed measurement model
was estimated using SPSS 12.0 and AMOS 5.0 analysis package. We conducted A series
of exploratory factor analyses and confirmatory factor analyses to assess the convergent
validity, discriminant validity, and reliability. The results indicate reasonable overall fits
between the model and the observed data. The overall fit of measurement model were 
= 159.699, p=0.004, d.f. = 116, GFI = .879, NFI = .898, CFI = .969, IFI = .970, TLI = .959,
RMR = .058. The results demonstrated that the data reasonably fitted the model. We also
examined construct reliability and reliability and average variance extracted (AVE). The
construct reliability of each construct was greater than .80 and the AVE of each
construct was greater than .50.
According to the analysis of Structure Equation Modeling (SEM), the results of path
model indicated an adequate fit of the model:  = 142.126, p = 0.044 , d.f. = 115, GFI =
.892, NFI = .909, CFI = .981, IFI = .981, TLI = .974, RMR = .057. As hypothesized, the
results showed that it is strategically important to establish trust in a franchise system,
and the franchisor's supports, communication and satisfaction with previous outcome tend
to reinforce franchisee's trust. The results also showed trust seems to decrease as the
experience of conflict episodes increases. And we also noticed that franchisor's supports
and communication tend to enhance the franchisee's satisfaction with previous outcome,
and communication tend to decrease conflict.
If the trust between the franchisor and franchisee can be established in a franchise
system, franchising offers many benefits and reduces many costs. To manage a mutual
trust of relationship with their franchisees, franchisor's should provide support effectively
to their franchisees. Effective assistant services have direct effect on franchisees' satisfaction with previous outcome and trust in franchisor. Especially, franchise sales
process, orientation, and training in the start-up period are key elements for success of
the franchise system. Franchisor's support is an accumulated separate satisfaction
evaluation with different kind of service provided by the franchisor. And providing
support definitely can improve the trustworthy image of the franchisor.
In the franchise system, conflicts of interests and exertions of different power sources
are very common. The experience of conflict episodes seems to negatively relate to trust.
Therefore, it is important to reduce the negative side of the relationship conflicts.
Communication actually plays a broader role in reducing conflict and establish mutual
trust in franchisor-franchisee relationship. And effective communication between
franchisors and franchisees can improve franchisees' satisfaction toward the franchise
system. As the diversification of Chinese markets, both franchisors and franchisees must
keep the relevant, timely, and reliable communication. And it is very important to
improve the quality of communication.
Satisfaction with precious outcomes seems to positively relate to trust. Franchisors and
franchisees that are highly satisfied with the previous outcomes that flow from their
relationship will perceive their partner as advancing their goal achievement. Therefore, it is
necessary for both franchisor and their franchisees to make the welfare of partner with effort.
Little literature has focused on what factors affect the trust between franchisors and
their franchisees in China. This study developed the hypotheses regarding the factors
affecting trust in the transaction relationship. The results of data analysis supported the
hypotheses strongly.
There are certain limitations in this study. First, we may point out that some other
factors missed in this study could be significantly important. Second, the context of this
study, food service industry, limits its potential generalizability for all franchise systems.
More studies in different categories of franchise system are needed to broaden its
generalizability. Third, the model was tested empirically in a sample in Beijing, more
empirical tests of the proposed model in other Chinese areas are needed. Finally, the
analysis in this study was solely based on the perception of franchisees and the opinions
of franchisors were not included.

영어초록

Since the implementation of economic reforms in 1978, the Chinese economy grows
rapidly at an average annul growth rate of 9% over the post two decades. Franchising
has been widely recognized as an important source of entrepreneurial activity. Trust is
important in that it facilitates relational exchanges by permits partners to transcend
short-run inequities or risks to concentrate on long-term profits or gains. In the
relationship between the franchisors and franchisees, trust has been described as an
important source of competitive advantage. However, little research has been done on the
factors affecting trust in Chinese franchisor-franchisee relationships. The purpose of this
study is to investigate what factors affect the trust in the franchise system in China, and
to provide guidelines and insights to franchisors which enter Chinese market.
In this study, according to Morgan and Hunt (1994), trust is defined as the extending
when one party has confidence in an exchange partner's reliability and integrity. We
offered a conceptual model of the empirical study. The model shows that the factors
affecting the trust include franchisor's supports, communication, satisfaction with previous
outcome and conflict. We also suggested the franchisor's supports and communication
like to enhance the franchisee's satisfaction with previous outcome, and the franchisor's
supports, communication and he franchisee's satisfaction with previous outcome tend to
decrease conflict.
Before the formal study, a pretest involving exploratory interviews with owners from
three franchisees was conducted to make sure the questionnaire was relevant and clear to
the respondents. The data were collected using trained interviewers to carry out personal
interviews with the aid of an unidentified, muti-page, structured questionnaire. The
respondents comprised of owners, managers, and owner managers of franchisee-owned food service franchises located in Beijing, China. Even though a total of 256 potential
franchises were initially contacted, the finally usable sample consisted of 125 respondents.
As expected, the sampling method was successful in soliciting respondents with waried
personal and firm characteristics.
Self-administrated questionnaires were used for all measures. And established scales
were used to measure the latent constructs in this study. The measures tapped the
franchisees' perceptions of the relationship with the referent franchisor. Five-point
Likert-type scales ranging from “strongly disagree” (=1) to “strongly agree” (=7) were
used throughout the constructs (trust, eight items; support, five items; communication,
four items; satisfaction, six items; conflict, three items).
The reliability measurements traditionally employed, such as the Cronbach's alpha,
were used. All the reliabilities were greater than .80. The proposed measurement model
was estimated using SPSS 12.0 and AMOS 5.0 analysis package. We conducted A series
of exploratory factor analyses and confirmatory factor analyses to assess the convergent
validity, discriminant validity, and reliability. The results indicate reasonable overall fits
between the model and the observed data. The overall fit of measurement model were 
= 159.699, p=0.004, d.f. = 116, GFI = .879, NFI = .898, CFI = .969, IFI = .970, TLI = .959,
RMR = .058. The results demonstrated that the data reasonably fitted the model. We also
examined construct reliability and reliability and average variance extracted (AVE). The
construct reliability of each construct was greater than .80 and the AVE of each
construct was greater than .50.
According to the analysis of Structure Equation Modeling (SEM), the results of path
model indicated an adequate fit of the model:  = 142.126, p = 0.044 , d.f. = 115, GFI =
.892, NFI = .909, CFI = .981, IFI = .981, TLI = .974, RMR = .057. As hypothesized, the
results showed that it is strategically important to establish trust in a franchise system,
and the franchisor's supports, communication and satisfaction with previous outcome tend
to reinforce franchisee's trust. The results also showed trust seems to decrease as the
experience of conflict episodes increases. And we also noticed that franchisor's supports
and communication tend to enhance the franchisee's satisfaction with previous outcome,
and communication tend to decrease conflict.
If the trust between the franchisor and franchisee can be established in a franchise
system, franchising offers many benefits and reduces many costs. To manage a mutual
trust of relationship with their franchisees, franchisor's should provide support effectively
to their franchisees. Effective assistant services have direct effect on franchisees' satisfaction with previous outcome and trust in franchisor. Especially, franchise sales
process, orientation, and training in the start-up period are key elements for success of
the franchise system. Franchisor's support is an accumulated separate satisfaction
evaluation with different kind of service provided by the franchisor. And providing
support definitely can improve the trustworthy image of the franchisor.
In the franchise system, conflicts of interests and exertions of different power sources
are very common. The experience of conflict episodes seems to negatively relate to trust.
Therefore, it is important to reduce the negative side of the relationship conflicts.
Communication actually plays a broader role in reducing conflict and establish mutual
trust in franchisor-franchisee relationship. And effective communication between
franchisors and franchisees can improve franchisees' satisfaction toward the franchise
system. As the diversification of Chinese markets, both franchisors and franchisees must
keep the relevant, timely, and reliable communication. And it is very important to
improve the quality of communication.
Satisfaction with precious outcomes seems to positively relate to trust. Franchisors and
franchisees that are highly satisfied with the previous outcomes that flow from their
relationship will perceive their partner as advancing their goal achievement. Therefore, it is
necessary for both franchisor and their franchisees to make the welfare of partner with effort.
Little literature has focused on what factors affect the trust between franchisors and
their franchisees in China. This study developed the hypotheses regarding the factors
affecting trust in the transaction relationship. The results of data analysis supported the
hypotheses strongly.
There are certain limitations in this study. First, we may point out that some other
factors missed in this study could be significantly important. Second, the context of this
study, food service industry, limits its potential generalizability for all franchise systems.
More studies in different categories of franchise system are needed to broaden its
generalizability. Third, the model was tested empirically in a sample in Beijing, more
empirical tests of the proposed model in other Chinese areas are needed. Finally, the
analysis in this study was solely based on the perception of franchisees and the opinions
of franchisors were not included.

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