It is the purpose of this study to demonstrate theoretically and empirically how the marketing strategy creation style implemented by a channel leader in a franchise system impacts the overall climate of trust within the channel system. Specifically, this study seeks to answer two important research questions: should franchisors direct franchisees in prescribed behaviors, or should the franchisees be allowed to play a more fundamental role in the strategy‐making process? How does this decision affect the overall level of trust within the franchise system relationship?
The paper investigates the impact of four common strategy‐making styles in a study of 244 fast food franchise businesses and compares the findings with those previously obtained in other settings.
Support was found for the hypotheses, which stated that the channel climate of franchise systems implementing the symbolic, generative, or transactive modes of strategy‐making would be characterized by a higher degree of trust than would the climate of franchise systems implementing the rational mode.
The empirical test considered only one industry (the fast food industry), and only one side of the franchisor‐franchisee dyad (the franchisee's perceptions) was used for the empirical tests.
The findings of the paper contribute significantly to an overall understanding of the development of effective, successful franchise channel relationships.
