Franchise management strategy driving franchisee performance in the service sectors in Thailand

Abstract

This empirical study aims to investigate the impact of different dimensions of franchise management strategies on franchisee performance in the professional service sector. The hypothesized relationship was supported by agency theory, which explains the situation of two parties, one representing the other in day‐to‐day transactions. The samples were 259 managers and supervisors who had worked for franchise service businesses located in Thailand and had regular contact with the franchisor of the global firm. Purposive and snowballing methods were employed to distribute questionnaires to the target respondents. The results of structural equation modeling indicated a good fit of the data to the proposed model. Hypothesis testing revealed noteworthy direct influences of four franchise management strategies, namely innovative culture, supportive service, information exchange, and recommendation, on the performance of franchisees. This study offers valuable insights into the importance of implementing effective franchise management strategies and their direct implications for franchisee performance. The findings have practical implications for franchise businesses, highlighting key areas of focus for enhancing franchisee success and overall business performance.