International Conference on Economics, Finance & Business, London

HOW SUPPORT AND COMMUNICATION ARE CRUCIAL TO FRANCHISEES’ PERFORMANCE: A COFFEE SHOP FRANCHISE CASE IN THAILAND

SIRISUHK RAKTHIN

Abstract:

Franchise business in Thailand has experienced growth, particularly in the hospitality sector. The value of the franchising businesses in the country is expected to rise up to 20% in 2024. Past studies have largely focused on the franchisor perspective. Yet, for a sustainable franchise business success, franchisees’ perceptions towards their success should be explored. The literature has highlighted the important role of franchisor support in bringing about the success of the franchise business. Similarly, communication is argued to influence franchisees’ trust in and satisfaction with the franchisor. However, a limited number of studies have yet to incorporate both trust and satisfaction to explain how support and communication affect franchisees’ performance. Thus, this study seeks to understand the role of support and communication of a franchisor in encouraging franchisees’ performance. The mediating role of trust towards their satisfaction with the franchisor will also be explored. By doing so, this study will also address the chicken-egg relationship of trust and satisfaction. An online survey was conducted with 221 franchisees of a particular Thai coffee shop franchise brand, which has international presence. The findings indicate that both communication and support are critical in influencing trust and satisfaction. Then, satisfaction positively influences franchisees’ evaluation of their operational and financial performance. Trust is found to have an indirect effect on their performance through satisfaction, highlighting that trust precedes satisfaction in the franchisor-franchisee relationship. Managerial implications are also offered.

Keywords: Franchisee Performance, Support, Communication, Trust, Satisfaction