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Published by: Allied Business Academies
Published in: "Academy of Marketing Studies Journal", 1999
Length: 16 pages

Abstract

The paper examines franchise owners' satisfaction with their businesses. Job satisfaction, its antecedents and outcomes have been a popular topic in organizational studies while few investigations have focused on entrepreneurial satisfaction. This is rather surprising since satisfaction has been emphasized as a fundamental measure for individual entrepreneurs (Cooper & Artz, 1993). Distinctively in franchising, satisfaction is a key concept in understanding channel member behavior (Robicheaux & El-Ansary, 1975). A questionnaire of six pages was mailed to 815 franchisees representing thirty-six retail, service, and restaurant, cafe & fast food franchises. A nationwide sample represented more than forty percent of the total amount of franchisors and over half of all franchisees in Finland. Response rate of forty-two percent (n=339) was obtained after two mailings and a reminder post card. Subsequently, data were enlarged and non-response bias was investigated by conducting 143 phone interviews. After careful examination of the data sets no significant bias was discovered. Consequently, data sets were combined (n=482). The final response rate was nearly sixty percent. Analysis centers on questions as follows: (1) How satisfied franchisees are with their businesses?; (2) What factors explain their satisfaction?; and (3) Does satisfaction or dissatisfaction affect franchise owners' commitment to their businesses? On the basis of past literature, two single item measures and set of multiple item measures for quantifying satisfaction were developed. Single item variables measured franchisees' overall satisfaction and their post engagement intentions. Four multiple item scales pertaining to franchise owners' business domains and one multiple measure tapping to franchisees' business environment were created by principal component analysis. Reliability and validity of the measures were evaluated. Employed statistical methods included multivariate analyses like a regression analysis and logistic regression. Franchisees were found to be fairly satisfied with their businesses. The conclusion was also supported by the scores of the particular satisfaction. Also, franchisees appeared to be committed to their franchises. Particular satisfaction components explained some forty percent of the total variance of franchisees' overall satisfaction. Moreover, it is suggested that franchisees' satisfaction is not only firmly associated with their post engagement intention, ie; proclivity to join up with the same franchise if given the opportunity, but also a causal relationship exists between satisfaction and commitment to franchise system. Implications for both franchisors and franchisees are presented. Also, propositions for future research are given.

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Abstract

The paper examines franchise owners' satisfaction with their businesses. Job satisfaction, its antecedents and outcomes have been a popular topic in organizational studies while few investigations have focused on entrepreneurial satisfaction. This is rather surprising since satisfaction has been emphasized as a fundamental measure for individual entrepreneurs (Cooper & Artz, 1993). Distinctively in franchising, satisfaction is a key concept in understanding channel member behavior (Robicheaux & El-Ansary, 1975). A questionnaire of six pages was mailed to 815 franchisees representing thirty-six retail, service, and restaurant, cafe & fast food franchises. A nationwide sample represented more than forty percent of the total amount of franchisors and over half of all franchisees in Finland. Response rate of forty-two percent (n=339) was obtained after two mailings and a reminder post card. Subsequently, data were enlarged and non-response bias was investigated by conducting 143 phone interviews. After careful examination of the data sets no significant bias was discovered. Consequently, data sets were combined (n=482). The final response rate was nearly sixty percent. Analysis centers on questions as follows: (1) How satisfied franchisees are with their businesses?; (2) What factors explain their satisfaction?; and (3) Does satisfaction or dissatisfaction affect franchise owners' commitment to their businesses? On the basis of past literature, two single item measures and set of multiple item measures for quantifying satisfaction were developed. Single item variables measured franchisees' overall satisfaction and their post engagement intentions. Four multiple item scales pertaining to franchise owners' business domains and one multiple measure tapping to franchisees' business environment were created by principal component analysis. Reliability and validity of the measures were evaluated. Employed statistical methods included multivariate analyses like a regression analysis and logistic regression. Franchisees were found to be fairly satisfied with their businesses. The conclusion was also supported by the scores of the particular satisfaction. Also, franchisees appeared to be committed to their franchises. Particular satisfaction components explained some forty percent of the total variance of franchisees' overall satisfaction. Moreover, it is suggested that franchisees' satisfaction is not only firmly associated with their post engagement intention, ie; proclivity to join up with the same franchise if given the opportunity, but also a causal relationship exists between satisfaction and commitment to franchise system. Implications for both franchisors and franchisees are presented. Also, propositions for future research are given.

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