Role of Functional Company Characteristics on Food Franchisee Behavior

ABSTRACT Purpose Due to increasing competition, creating and enhancing franchisee patronage behaviors are critical elements in the food franchise industry. Franchise brand-related characteristics are known to influence franchisees’ evaluations. Thus, this paper examines the antecedents of franchisees’ perceived value, which leads to positive behaviors in the food franchise sector. Design/methodology/approach A research model is proposed to describe relationships among different types of functional company characteristics (i.e. quality, innovation, and price) on perceived value and behavioral intentions, and impact of operational involvement in the context of franchisees. A quantitative approach was leveraged to collect 266 usable online questionnaires, together with SmartPLS to analyze the measurement model and proposed hypotheses. Findings Results show that perceived quality on the part of franchisees is the most significant determinant of perceived value, followed by perceived innovation and price. Also, the impact of perceived value on franchisees’ intentions – including continuous and word-of-mouth intentions – is supported. Last, the role of operational involvement (i.e. duration and number of food franchise operations) in perceived value is examined. Originality/value To add to the limited research in the behaviors of franchisees, this study provides useful insights to achieve sustainable growth in the franchise brand context.