Franchisee Satisfaction: Causes and Consequences

A trend has been developing in the United States towards the use of vertical marketing systems. Of the many types of vertical marketing systems, franchising has become one of the most dominant. This is evidenced, in part, by the nearly one‐third of retail sales in 1973 that were through franchised retailers (US Department of Commerce, 1974). The success of the franchise form of distribution hinges upon franchisors and franchisees both contributing skills and resources, frequently however franchisees and franchisors become dissatisfied with the other's contributions and actions. This dis‐satisfaction in some cases leads to substantial friction. Although it is not clear that conflict (friction) will always decrease channel efficiency it is probably safe to assume that continued conflict would be dysfunctional in a franchise channel. It is therefore the purpose of this article to discuss and empirically test several propositions about the franchisee's satisfaction with his franchisor.