The Dual Role of Communication in Franchise Relationships: A Franchisee Perspective

Although the role of communication in franchise relationships is well recognized, it is not well understood. This paper proposes two higher-order latent constructs—relationship positivity and relationship negativity—each of which is reflected in four first-order constructs. The paper investigates the influence of communication on both positivity and negativity simultaneously. Authors collected data from 300 franchisees of a franchise system in Korea, and estimated a structural equation model to test the hypotheses. Results demonstrate the dual influence of communication—it enhances positivity and reduces negativity. More importantly, and somewhat surprisingly, communication is more effective at enhancing positivity in a relationship than at reducing negativity.