Relational bonding strategies in the franchise

industry: the moderating role of duration of

the relationship
Yong-ki Lee
School of Business, Sejong University, Seoul, Republic of Korea
Sally Kim
Harry F. Byrd Jr., School of Business, Shenandoah University, Winchester, Virginia, USA
Min-Seong Kim
School of Hospitality Administration, J. Mack Robinson College of Business, Georgia State University, Atlanta, Georgia, USA
Jae-Han Lee
Department of Food Service Franchise Business Administration, Shinhan University, Uijeongbu-Shi, Republic of Korea, and
Ki-Taek Lim
School of Business, Sejong University, Seoul, Republic of Korea

Abstract
Purpose – This paper aims to examine the effect of different relational bonding strategies on franchisees’ perceptions of benefits. The duration of
the relationship is framed as a moderator between three types of relational bonds and the perceived benefits.
Design/methodology/approach – The data are collected via a survey from foodservice franchisees in South Korea. To test the study’s hypotheses,
the research model was estimated with two-stage least squares.
Findings – The result shows that social and structural bonds have a significant impact on franchisees’ perceptions of benefits. There are some
significant interactions between different types of relational bonds and the duration of the relationship. Perceptions of benefits are found to influence
satisfaction, intentions to recommend, intentions to renew the contract and long-term orientation.
Practical implications – The study suggests that franchisors may want to focus on developing and strengthening social bonds, and also customize
their relational approaches based on the duration of the relationship with the franchisees.
Originality/value – This research illustrates the impact of three types of relational bonding strategies on franchisees’ perceptions of the benefits
and also examines the significant moderating role of the duration of the relationship.
Keywords Satisfaction, Long-term orientation, Relational bonds, Duration of the relationship, Franchise industry
Paper type Research paper

1. Introduction Morgan, 2003) at a rate of 15 to 30 per cent (White, 2010). One

of the key determinants for success in a franchise operation is
Franchise businesses in the USA account for 10.5 per cent
how efficiently a franchisor and the franchisees can work together
of the businesses, representing 4.3 million franchise
toward shared goals and maintain a mutually beneficial
establishments, $7,658 billion in revenue and 18 million jobs
relationship. In their study that examined the franchisor–
(Washington Post, 2012). Significant representation of
franchisee relationship and business performance, Brown and
franchise operations can also be observed in many other parts
Dev (1997) report that the closer the relationship between a
of the world, including South Korea and Australia, where the
franchisor and the franchisees, the better the individual
franchising sector accounts for 10 and 14 per cent of the
franchisees perform and the stronger the franchise chain
country’s gross domestic product (GDP), respectively (KB
becomes. It is important for franchisors to develop and
Daily Knowledge Vitamin, 2012; Wright and Grace, 2011).
manage a profitable long-term relationship with their
Surprisingly, in parallel to industry growth, the failure rate of
franchisees because a continuous relationship means not only
franchise operations has gone up over the years (Holmberg and
a steady stream of revenues from franchisees but also a
building of economies of scale through multiple-store
ownership. A franchisor–franchisee relationship is unique and
The current issue and full text archive of this journal is available on
somewhat different from traditional business-to-business
Emerald Insight at: www.emeraldinsight.com/0885-8624.htm

Received 30 October 2013

Journal of Business & Industrial Marketing Revised 3 March 2014
30/7 (2015) 830 –841 22 July 2014
© Emerald Group Publishing Limited [ISSN 0885-8624] 25 August 2014
[DOI 10.1108/JBIM-10-2013-0237] Accepted 4 September 2014

830
 Relational bonding strategies in the franchise industry
Yong-ki Lee et al.
relationships. In the franchise system, a franchisor and a
franchisee are two separate legal entities, having both
competing and shared goals. While the relationship bound by
a legal contract requires franchisees to comply with the
franchisor’s rules and standards, franchisees may pursue their
own interests or deviate from the rules, creating and causing
conflicts. This is why many scholars have focused their
research on goal-sharing and identity in the franchise system
(Lawrence and Kaufmann, 2011), conflict and organizational
structure (Cochet and Ehrmann, 2007; Lawrence and
Kaufmann, 2010) and also the psychological traits of
franchisees (Hing, 1995; Morrison, 1997). An efficient
franchise system requires a collaborative franchisor–franchisee
relationship and effective relationship bonding strategies.
Some scholars (Zaefarian et al., 2011) argue that firms enter
into business relationships to access resources held by other
firms because they have limited opportunities to act
independently. Based on this resource-based approach, a
franchisor and its franchisees become capable of accessing and
acquiring resources by entering into a relationship, and the
quality of interactions becomes a critical factor for successful
operation. Although there are some studies on relationship
marketing in business markets, most of them focused on the
manufacturing industry (Claro et al., 2003; Donaldson, and
O’Toole, 2000; Fink et al., 2008; Kohtamaki and Bourlakis,
2012; Sweeney and Webb, 2007; Tao et al., 2008). Therefore,
one of the unique contributions of this study is that it
examines relationship marketing strategies in the service
franchise industry and shows the impact of the strategies on
the franchisor–franchisee relationships.
Prior research (Brown and Dev, 1997) suggests that a
franchisor–franchisee exchange is embedded in social
relationships, and the effect of relational approaches used by a
franchisor should be moderated by relational properties such
as the duration of the relationship. Yet very little empirical
evidence is available to show that relationship properties such
as the duration of the relationship actually influence the
franchisor–franchisee relationship. Several studies have
explored the role of the duration of relationships in
business-to-business settings (Gounaris and Venetis, 2002;
Claro et al., 2003; Kumar et al., 2003). However, the findings
are either mixed or inconclusive. The lack of a consensus on
this issue prompted Fink et al. (2008, p. 540) to call for further
research to examine time as a relationship variable. They note
in their study that “the factors that influence customer–
supplier relationship outcomes vary with time and more
studies need to be conducted to further enhance our
understanding of time as a variable”.
In this study, we investigate how different relational
bonding strategies help enhance the franchisor–franchisee
relationships and examine the role of the duration of the
relationship as a time variable. In summary, we address the
following questions:
● Q1. How do different relational bonding strategies
(financial, social and structural) influence franchisees’
perceptions of benefits?
● Q2. How does duration of the relationship affect the
relative impact of the relational bonding strategies on the
franchisees?
831
Journal of Business & Industrial Marketing
Volume 30 · Number 7 · 2015 · 830 –841
● Q3. Do franchisees’ positive perceptions of benefits lead to
desirable relational outcomes?
To address these research questions, we develop a model
based on the literatures of relationship marketing and social
psychology. The model incorporates hypotheses related to the
effect of three relational bonding strategies on the franchisor–
franchisee relationships. Of particular interest is whether and
how the duration of the relationship influences the effect of
relational strategies on the benefit perceptions of the
franchisees. We also examine the effect of benefit perceptions
of franchisees on their satisfaction judgment and future
behavioral intentions. The model is estimated using data from
franchisees of food service franchise organizations.
The practical contribution of this study is that it provides
franchise organizations with guidance on how to allocate and
prioritize resources to enhance the relationship with their
franchisees, and customize relationship activities based on the
duration of the relationship. In addition, the study makes
contributions to the literature by adding evidence to the
concept of relationship marketing in the franchise industry.
2. Conceptual framework
2.1 Three types of relational bonds
Coviello and Brodie (2001) studied marketing practices of
various organizations and reported that while firms focusing
on consumers are somewhat transactional in their approach to
the target market and business-to-business firms are
relational, overall patterns of the marketing practices are
similar across firm type. We view three types of relational
bonds identified and elaborated on by Berry (1995) which can
be successfully applied to business-to-business relationships.
In his work, Berry (1995) discusses three types of relational
bonds and their distinctions in terms of the nature of bonding,
degree of service customization and sustained competitive
advantage. According to Berry (1995), the most basic form of
relationship bonds is formed based on financial incentives.
Examples of the tactics focusing on this type of relational
bonds include price incentives, volume discount and
frequency marketing programs (e.g. business-to-business
loyalty programs). Although a financial incentive can easily be
planned and implemented, its potential for developing a
strong relational bond is relatively low. This is because
business-to-business relationships typically require heavy
investments into the relationship (e.g. sharing data), which
can raise the switching barriers. In this type of environment,
the role of financial incentives in terms of customer acquisition
may not be as prominent as in the business-to-consumer
relationships where consumers can rather easily switch from
one company to another for a better deal.
The second type of relationship marketing primarily relies
on social bonds. Firms focusing on social bonds understand
that building a relationship involves social interactions and
that the quality of social interactions is an important element
for building these social bonds. For this type of relational
bonding strategy, friendship, familiarity, personalization and
customization are important elements (Berry and
Parasuraman, 1991; Williams et al., 1998). Because a
relationship is built based on person-to-person interactions
involving emotional engagement, it may prove difficult for
 Relational bonding strategies in the franchise industry
Yong-ki Lee et al.
competitors to imitate. Several studies (Sweeney and Webb,
2007; Wilson and Jantrania, 1995) support the idea that social
bonds are critical for developing and protecting customer
relationships, which can lead to trust and commitment.
The last type of relationship marketing strategy is based on
structural bonds. Firms focusing on this level rely on
structural solutions in establishing and maintaining a
relationship with their customers. The structural solutions
may include technical or informational factors (e.g. requesting
a business partner to adopt a software that enables the partner
to share certain information) and strategic partnership (e.g.
co-branding). Because structural bonding typically requires
significant investments, it creates foundations for sustaining
relationships. Therefore, firms that are structurally tied find
switching costs to be high and view each other as strategic
partners in achieving shared goals.
Prior research (Rao and Perry, 2002; Sweeney and Webb,
2007) shows that relational bonds can lead to many positive
outcomes such as high levels of satisfaction, trust and
commitment, and favorable purchase behaviors. For example,
Lacey and Morgan (2009) based on the commitment–trust
theory of relationship marketing report that structural bonds
(sharing of information) affect commitment, which increases
repurchase intentions and referral intentions. Sweeney and
Webb (2007) who examined different types of relational
benefits on the buyer–supplier relationships report that social
benefits explain larger variances than psychological benefits in
a buyer’s commitment to the relationship. On the other hand,
functional benefits (e.g. operating efficiencies and stronger
competitive position) are found to explain the firm’s
commitment to the relationship. Based on prior research, we
view that different relational bonding strategies will have a
differential impact on the franchisor–franchisee relationships,
and the relative effect of relational bonds may be explained by
the length of the relationship.
2.2 Time as a variable in the business-to-business
relationship
We believe the duration of the relationship viewed as a time
component offers significant insights “for a more meaningful
conceptualization and interpretation of phenomena linked to
relationship marketing” as stated in the study of Plakoyiannaki
and Saren (2006, p. 218). Duration of the relationship is
defined as the amount of time a customer has engaged with
the firm. A review of relationship marketing studies suggests
that customers of short-term versus long-term durations may
differ in several aspects. First, duration of the relationship may
influence the nature of the relationship. Ford (1980) states
that the nature of a buyer–seller relationship changes over
time, as uncertainty and relational distance (e.g. social
distance) are reduced, as the two parties have accumulated
experiences with each other and the relationship has matured.
Therefore, existing relationships in an industrial market are a
substantial barrier to another company who wants to enter the
market because of inertia (resistance to change) and risks
involved with changing suppliers.
Second, several studies suggest that the duration of the
relationship is an important determinant of relative
importance of service attributes. Sabiote and Roman (2009)
show that the duration of the relationship moderates the effect
832
Journal of Business & Industrial Marketing
Volume 30 · Number 7 · 2015 · 830 –841
of the social regard displayed by the employees on customers’
satisfaction and trust. Their study finds that the quality of
social interactions with customers is more important in the
early stage of the relationship. Similarly, Gounaris and Venetis
(2002), who examined the effects of different quality
dimensions (hard quality, soft quality and outcome quality)
and relational bonds (personal bonds and contractual bonds)
on trust in the context of industrial services, report that the
duration of the relationship moderates the relationship
between service attributes and trust. Using the Chow test, they
showed that customers in mature relationships focus on the
immediate outcome, the soft process (how the service is
performed), the hard process (what is being performed) and
the final outcome, while those in novel relationships
emphasize potential quality. Another study that reports a
significant moderating effect of duration of the relationship is
that of Sweeney and Webb (2007). The study examined three
types of relationship benefits (functional, psychological and
social) in the manufacturing industry and found that
functional benefits have a constant effect on the firm’s
commitment to the relationship. On the other hand, social and
psychological benefits were found to play a more important
role in mature relationships than in novel relationships. The
finding of the study, that social aspects play a less important
role in novel relationships than mature relationships, conflicts
with some other studies that showed opposite results
(Gounaris and Venetis, 2002; Sabiote and Roman, 2009),
leading to inconclusive results on the duration of the
relationship.
Third, customers of long-term versus short-term durations
may respond differently in dealing with negativity. Prior
research shows that customers in long-term relationships
display less tolerance toward negative incidents than those in
short-term relationships (Grayson and Ambler, 1999;
Moorman et al., 1992). For example, Bolton (1998) shows
that customers weigh perceived losses more heavily when prior
satisfaction is high. This is understandable because satisfied
customers generally hold high expectations of the firm. Upon
encountering a negative incident, a previously satisfied
customer may perceive a larger discrepancy between his/her
expectation and the company’s performance, resulting in
dissatisfaction.
In summary, a review of the literature suggests that the
duration of the relationship may play an important role in
franchisees’ assessment of the franchisor. However, studies
on durations of relationships in the business-to-business
contexts have so far been inconclusive. Kohtamaki and
Bourlakis (2012), who considered duration of the
relationship as a moderator, report no significant role of
duration of the relationship in their examination of the
three antecedents of relationship learning: the supplier’s
relationship-specific investments, social capital and
relational practices. Similarly, Claro et al. (2003) found no
significant effect of duration of the relationship on
relational governance behaviors such as joint planning and
joint problem solving. The current study adds further
evidence to the literature by examining the role of the
duration of the relationship in the franchise industry.
 Relational bonding strategies in the franchise industry
Yong-ki Lee et al.
2.3 Social exchange, reciprocation and perceived value
Social exchange theory (Blau, 1964) is helpful for
understanding relationships. Based on this theory, social
relationships are sustained when the involved parties view the
perceived benefits as outweighing the perceived costs
associated with staying in the relationship. Reciprocity,
defined as “the giving of benefits to another in return for
benefits received” (Molm et al., 2007, p. 199), is a defining
characteristic of social exchange. In social relations, the
involved parties assess the value of the benefits that are offered
by the partners, and the perceived value plays an important
role in sustaining the relationship. Molm et al. (2007) suggest
two dimensions of value of reciprocity:
1 instrumental or utilitarian value; and
2 symbolic or communicative value.
Instrumental value is concerned with the value of the good,
service or social outcome and is directly related to utility. For
example, in franchisor–franchisee relationships, franchisees
may perceive benefits (e.g. financial support) offered by the
franchisor as utility. Symbolic or communicative value refers
to the value conveyed by the act of reciprocity involving the
benefits above the instrumental value of the benefits. The
important feature of symbolic value is that information about
the partner and the relationship is conveyed (e.g. “we care
about our partners”.) so that it reduces uncertainties for the
partner and strengthens social relations through the
communication of that information.
Prior research (Fiore et al., 2005; Lee et al., 2014)
suggests that relational context may play a role in
determining the relative importance of utilitarian and
symbolic benefits. In experience-based consumption
situations, people tend to focus on the symbolic benefits in
evaluating the experience. We believe, for business-
to-business relationships, instrumental or utilitarian
benefits will play a more significant role than the symbolic
benefits in evaluating the relationship (Blau, 1964).
Franchisor–franchisee relationships are formed based on
contractual agreements that stipulate specific roles and
expectations related to the social exchange. This relational
nature drives franchisees to focus on the utilitarian benefits
rather than the symbolic benefits, making them seek specific
outcomes helpful for the business. Considering the context
of this study, we examine the role of utilitarian benefits in
influencing several relational outcome variables.
3. Hypotheses
3.1 The impact of relational bonding strategies on
perceptions of utilitarian benefits
Different relationship-building tactics (e.g. sharing information)
are likely to influence how franchisees perceive utilitarian
benefits. Franchisees who are structurally tied to the
franchisor (e.g. sharing database information) will view that
structural bonds are supposed to enhance business
performance and help them to achieve shared goals (e.g.
revenue increase), realizing utilitarian benefits. Similarly,
social bonds, characterized as business friendship and
intimate interactivity, are expected to influence franchisees’
perceptions of utilitarian benefits. A number of studies (Rao
and Perry, 2002; Sweeney and Webb, 2007; Yen and
833
Journal of Business & Industrial Marketing
Volume 30 · Number 7 · 2015 · 830 –841
Barnes, 2011) in the business-to-business contexts report
the critical role of social bonds in forming and maintaining
a relationship with the customers. For example, Sweeney
and Webb (2007) found that social aspects of the
relationship influence a buyer’s commitment to the firm.
Based on prior research, we view that social bonding
strategies will have a positive influence on franchisees’
perceptions of the relationship quality and the utilitarian
benefits that accrue from the exchange process.
Financial bonds are also expected to influence franchisees’
perceptions of utilitarian benefits. While financial incentives
such as loyalty programs and price promotions are most
commonly used in consumer markets, they are also used
across an array of business markets, including airlines, retailers
and financial services. Although there are many studies (Chiu
et al., 2007; Liang and Wang, 2008; Lin et al., 2003) in
consumer markets that have examined and linked financial
incentives to relationship development, a review of the
relationship marketing literature indicates a paucity of
research on this issue in business markets (Lacey and Morgan,
2009). The one study (Lacey and Morgan, 2009) that
specifically examined the impact of business-to-business
loyalty programs on relational outcomes reported that the
programs do not have any moderating effect on the
relationships that the study considered (e.g. a link between
trust and commitment). The study did not specifically
examine a direct impact of loyalty programs on relational
outcomes (e.g. repurchase intentions). We believe financial
incentives will enhance franchisees’ perceptions of the
utilitarian benefits. To sum up, we propose that all three types
of bonds (financial, social and structural) will have a positive
influence on the franchisees’ perceptions of the utilitarian
benefits:
H1. Financial bonds will have a positive effect on the
franchisees’ perceptions of the utilitarian benefits.
H2. Social bonds will have a positive effect on the
franchisees’ perceptions of the utilitarian benefits.
H3. Structural bonds will have a positive effect on the
franchisees’ perceptions of the utilitarian benefits.
3.2 The moderating role of duration of the
relationship
Prior research (Gounaris and Venetis, 2002; Sweeney and
Webb, 2007; Yen and Barnes, 2011) suggests that relationship
marketing strategies have to be modified based on relational
characteristics such as duration of the relationship. In our
view, the role of social bonds will be greater in the early stage
of the relationship. In consumer markets, Coulter and Coulter
(2002) showed that customers in the early stage of the
relationship consider politeness and empathy more important
than those in the mature relationships. This may be due to the
fact that in the early stage of the relationship, customers face
high levels of uncertainties and risks (Ford, 1980). As a coping
strategy, customers in immature relationships may seek
relational benefits that are helpful for reducing the undesirable
conditions. Therefore, such service attributes as friendliness,
empathy and politeness may become important for forming a
relationship. A study by Dagger et al. (2009) also supports our
 Relational bonding strategies in the franchise industry
Yong-ki Lee et al.
assumption. The researchers found that for shorter-duration
relationships, contact frequency enhanced commitment, trust
and satisfaction. They found no such effect for
longer-duration relationships. These previous studies suggest
that franchisees may rely on social elements of the service
more in the early stage of the relationship. As franchisees
become more accustomed to the franchise operation, they
may not need as many social resources to maintain their
relationship. Hence, we expect that social bonding strategies
will have a diminishing marginal return as the relationship
matures.
Along with Berry (1995), we view financial bonds to be
the most basic form of relationship-building strategies.
While this type of bond is easily formed, the relationship
can be easily broken. Reinartz and Kumar (2000) conclude
in their study that promotions are more effective for
short-term customers than long-term customers.
Long-term customers tend to be less price sensitive than
short-term ones. This means that financial incentives may
be effective in the early stage of the relationship. As the
relationship matures, the nature of the relationship
becomes more relationship-focused (Bolton, 1998; Dwyer
et al., 1987), and financial incentive-based tactics may
become less effective. Therefore, we propose that financial
bonding strategies will have a diminishing return on
investment as the relationship matures.
Structural bonds are formed based on the structural
solutions, which often require significant investments. This
means that franchisees who are structurally tied may
encounter high switching costs as the relationship matures.
Therefore, in longer-duration relationships, structural bonds
will have a greater impact on the relationship. On the other
hand, in relationships that are newly formed, structural bonds
may not have such a significant impact on the relationships.
Based on the discussion above, we propose the following
hypothesis:
H4. Duration of the relationship will moderate the
relationship between relational bonds and franchisees’
perceptions of the franchisor. More specifically, the
relative importance of the financial and social bonding
strategies will decrease, as the relationship matures. On
the other hand, the relative importance of the structural
bonding strategies will increase as the relationship
matures.
3.3 The impact of perceived utilitarian benefits on
relational outcome variables
According to the social exchange theory (Blau, 1964), the
parties involved in a social exchange swap benefits, and the
relationship is sustained by acts of reciprocity. Prior
research (Lee et al., 2014; Yang and Peterson, 2004)
suggests that customers who perceive benefits from the
exchange process reciprocate by engaging in positive
responses: satisfaction, willingness to recommend,
willingness to patronage (renew the contract) and
long-term orientation. We view that these positive
responses are shaped and influenced by perceptions of
benefits. Many studies (Lee et al., 2014; Yang and
Peterson, 2004) support the idea that customers’
834
Journal of Business & Industrial Marketing
Volume 30 · Number 7 · 2015 · 830 –841
perceptions of benefits are one of the critical determinants
for obtaining customer satisfaction and loyalty. For
example, Lam et al. (2004), who examined relational
variables in a business-to-business context, showed that
customers’ perceived benefits have a direct significant effect
on satisfaction judgment and loyalty.
Satisfaction in the business-to-business relationships is
defined as a positive affective state resulting from the appraisal
of all aspects of the firm’s working relationship with another
firm (Geyskens et al., 1999). Because perceptions of utilitarian
benefits influence how franchisees evaluate the franchisor,
franchisees’ satisfaction with the franchisor will be affected by
their perceptions of utilitarian benefits. Based on the
reciprocation rule, franchisees who perceive benefits will
engage in the behaviors that are favorable to the franchisor.
Therefore, we view that perceived benefits will influence
franchisees’ willingness to engage in positive word-of-mouth
(recommendation) and to renew the existing contract.
Long-term orientation, defined as one’s willingness to make
short-term sacrifices to realize long-term benefits by Anderson
and Weitz (1992), is also expected to be influenced by
perceptions of benefits. In summary, we offer the following
hypothesis:
H5(a-d). Perceptions of utilitarian benefits will have a
positive influence on (a) satisfaction judgment, (b)
willingness to renew the contract, (c) willingness to
recommend and (d) long-term orientation.
In summary, this study investigates how three different
relational bonding strategies influence franchisees’
perceptions of the benefits by considering financial, social
and structural bonds; duration of relationship; and
interactions between each relational bond and the duration
of the relationship as predictors of perceived benefits. We
also explore how perceived benefits influence franchisees’
satisfaction and behavioral intentions. Figure 1 presents our
hypothesized model.
4. Research methods
4.1 Sample and data collection
Data were collected using a cross-sectional survey on food
service franchisees in South Korea. We used the Korean
Directory of Franchise Establishments as a sampling frame
and contacted only those food service franchisees located in
Figure 1 Hypothesized model
DR
SAT
FB H1 H4 H5a
REC
H5b
SB H2 UB
H5c
RENEW
H3 H5d
STB
LO
 Relational bonding strategies in the franchise industry
Yong-ki Lee et al.
Seoul and Kyonggi Providence. Once we identified 550
franchise owners and/or managers who had agreed to
participate in the study, we dropped off a questionnaire at
each franchisee’s location. We collected completed
questionnaires after a two-week period. A pretest involving an
exploratory interview with several franchise owners was
conducted to ensure that the questionnaire was designed
appropriately and that there was no potential problem with
wording. After discarding several responses due to missing
information, we had the final sample size of 496 for a response
rate of 90.2 per cent.
Of the final sample of 496 respondents, 60.1 per cent were
male, and the median age was in the category of 36-40. The
median number of employees of the franchise establishments
was six. The most common types of franchise establishments
were coffee/ice cream retail stores (20.2 per cent), Korean
food restaurants (18.1 per cent), bakeries (11.1 per cent) and
pubs (10.9 per cent).
4.2 Measures
All constructs except the duration of the relationship were
measured with multiple items that had been developed and
tested in previous studies. Items were measured on a
seven-point Likert-type scale anchored by “strongly
disagree” and “strongly agree”. Three dimensions of
relational bonds were measured with items adopted from
the study of Chiu et al. (2005). Financial bonds were
measured with four items, while the social and structural
bonds were measured with five items and three items,
respectively. Respondents were asked to write down the
number of months they had been in business with the
franchisor, and this was used as a measure of the duration of
the relationship. To measure franchisees’ overall satisfaction, we
adopted six measures from the previous studies (Gassenheimer
et al., 1996; Oliver, 1980). We used five items to measure
long-term orientation based on the study of Ganesan (1994). To
measure franchisees’ intentions to renew the contract and to
recommend, we asked the respondents to rate three items and
two items, based on Zeithaml et al. (1996). Finally, we measured
the perceived utilitarian benefits by asking the respondents to
evaluate eight subjective items. The items were adapted from
Kohli and Jaworski (1990) and Prieto and Revilla (2006).
The measures used in the study were subjected to
reliability and validity analyses. Reliabilities were assessed
using Cronbach’s alpha coefficients which ranged from
0.831 to 0.948. Coefficients exceeding 0.70 are considered
acceptable (Nunnally, 1978). The items were then
subjected to a validity analysis. Principal components
analysis with varimax rotation was performed to determine
whether the items measuring each construct loaded
properly on the hypothesized factors. A couple of items with
high cross loadings were eliminated to enhance convergent
and discriminant validities based on the common practices
used in prior research (Han et al., 1998). More specifically,
one item each from the scales measuring social bonds and
intentions to renew the contract was eliminated through
this purification process. It should be noted that the use of
measurement items pruned based on their performance in
the research sample rather than a pretest sample is one of
the limitations of the study. Table I shows the final scale
835
Journal of Business & Industrial Marketing
Volume 30 · Number 7 · 2015 · 830 –841
items used for the model estimation, along with Cronbach’s
alpha coefficients and factor loadings. In addition to the
results of the principal components analysis, a correlation
matrix was obtained to examine the correlation coefficients
against the associated reliabilities. The result showed
evidence of discriminant validity because none of the
squared correlations between any two scales was higher
than the reliabilities of the scale (Churchill, 1979). Table II
shows the correlation matrix and descriptive statistics for
the model variables. To check for evidence of common
method bias, we used Harman’s single-factor test (Bauer
et al., 2006; Lee et al., 2011; McFarlin and Sweeney, 1992).
Common method variance is assumed to exist when a single
factor accounts for the majority of the variance in the
variables. Our test result shows that a one-factor model fit
is worse than a multidimensional model (an eight-factor
model), suggesting that common method bias does not pose
a serious threat to our study. We also conducted a
confirmatory factor analysis on each pair of primary
measures to examine whether the model constraining the
measures to be the same is significantly different from the
unconstrained model. If the chi-square differences are
significant, evidence of discriminant validity is indicated
(Rust et al., 2002). The test result demonstrated
discriminant validity among the constructs.
5. Analysis and result
5.1 Model estimation
To estimate the model, a composite index was created for each
construct by computing the average of the items. This method
was adopted based on the evidence of reliabilities and validity of
the measures. We used two-stage least squares (2SLS) to
estimate the model. The rationale for the selection of the
estimation procedure is based on our model specification. In our
study, the perceived benefits are considered both a dependent
variable and a predictor variable, acting as a mediator between
relational bonds and outcome variables. 2SLS is appropriate for
estimating a model with such specification. Another reason for
selecting this estimation method is based on common practices
used in previous studies testing for moderating effects (Bolton
et al., 2003; Han et al., 1998). Several researchers (Bollen, 1989;
Im et al., 2008) suggest that 2SLS is preferred to structural
equation modeling when the model includes nonlinear
interaction effects. The results of the model estimation are
presented in Table III.
5.2 Hypothesis testing
5.2.1 The effects of relational bonds (H1-H3)
H1-H3 predict that different relational bonds will have a
positive influence on the franchisees’ perceptions of utilitarian
benefits. We tested H1-H3 by examining the standardized
coefficients of the regression equations. In Table III, the
standardized coefficients are converted to show the percentage
of variance explained in the dependent variable. Both social
(â ⫽ 0.458, p ⬍ 0.01) and structural (â ⫽ 0.166, p ⬍ 0.01)
bonds have a positive influence on perceptions of utilitarian
benefits, whereas financial (â ⫽ 0.062, n.s.) bonds have no
significant influence. Thus, H2 and H3 are supported while
H1 is not supported.
 Relational bonding strategies in the franchise industry Journal of Business & Industrial Marketing
Yong-ki Lee et al. Volume 30 · Number 7 · 2015 · 830 –841

Table I Scale items, reliability and convergent validity results

Construct and item measures Factor loadings
Financial bonds ␣ ⫽ 0.831
This franchisor provides cumulative points programs 0.762
This franchisor supplies my store with materials and products with a special price 0.871
This franchisor offers free gifts for regular transactions 0.845
This franchisor offers additional rebates if I trade beyond a certain amount 0.795

Social bonds ␣ ⫽ 0.936

This franchisor keeps in touch with me and has established a good relationship 0.893
The franchisor is concerned with my needs 0.933
This franchisor helps me resolve problems regarding my store 0.943
This franchisor asks my opinions about services 0.898

Structural bonds ␣ ⫽ 0.859

This franchisor offers a variety of ways to get information more efficiently 0.900
This franchisor provides me with news, study reports or transaction information that I need 0.915
This franchisor provides products or services from other sources to resolve my problems 0.843

Utilitarian benefits ␣ ⫽ 0.948

This franchise helps with earnings 0.839
This franchise helps with sales growth 0.875
This franchise helps with return on investment 0.866
This franchise helps with saving costs 0.835
This franchise helps increasing reputation of my business 0.889
This franchise helps increasing store image 0.889
This franchise helps increasing perceptions of product quality 0.844
This franchise helps with operation know-how 0.825

Satisfaction ␣ ⫽ 0.935
Overall, I am very satisfied with my franchisor 0.867
Overall, my franchisor is very cooperative 0.880
Overall, my expectations have been met with regard to my franchisor 0.896
I am satisfied with the decision of the contract with my franchisor 0.877
I have a good feeling toward my franchisor 0.845
I am satisfied with the supply service from my franchisor 0.851

Intentions to recommend ␣ ⫽ 0.920

I will say positive things about the franchisor to other people 0.962
I will recommend the franchisor to someone who seeks my advice 0.962

Intentions to renew the contract ␣ ⫽ 0.871

I am planning to renew the contract once the contract expires 0.942
I will not switch to another franchisor even if they offer better terms 0.942

Long-term orientation ␣ ⫽ 0.923

I believe that over the long run our relationship with this franchisor will be profitable 0.880
Maintaining a long-term relationship with this franchisor is important to us 0.909
I focus on long-term goals in this relationship 0.880
I am willing to make sacrifices to help this franchisor from time to time 0.895
Any concessions I make to help out this franchisor will even out in the long run 0.807

5.2.2 Interactions between relational bonds and duration of the
relationship (H4)
H4 posits that the duration of the relationship will moderate
the relationship between three types of relational bonds and
the perceived utilitarian benefits. To check for interaction
effects, nested model joint F-tests were conducted in which
full and reduced models (a model with interaction terms
versus a model without interaction terms) were compared.
The test result shows that the addition of the interaction terms
significantly contributed to the explained variance.
Interactions between financial bonds and the duration of the
relationship (FB ⫻ DR) were found to be insignificant (â ⫽
⫺0.004, n.s.). However, the interactions between social bonds
and duration of the relationship (â ⫽ ⫺0.239, p ⬍ 0.01) and
the interactions between structural bonds and the duration of
the relationship (â ⫽ 0.119, p ⬍ 0.05) were significant (SB ⫻

836
 Relational bonding strategies in the franchise industry Journal of Business & Industrial Marketing
Yong-ki Lee et al. Volume 30 · Number 7 · 2015 · 830 –841

Table II Construct intercorrelations, mean and standard deviation

Variables 1 2 3 4 5 6 7 8
1. FB 1.000
2. SB 0.542ⴱⴱ 1.000
3. STB 0.507ⴱⴱ 0.703ⴱⴱ 1.000
4. UB 0.433ⴱⴱ 0.618ⴱⴱ 0.522ⴱⴱ 1.000
5. SAT 0.418ⴱⴱ 0.532ⴱⴱ 0.512ⴱⴱ 0.595ⴱⴱ 1.000
6. REC 0.294ⴱⴱ 0.527ⴱⴱ 0.398ⴱⴱ 0.721ⴱⴱ 0.449ⴱⴱ 1.000
7. RENEW 0.166ⴱⴱ 0.483ⴱⴱ 0.419ⴱⴱ 0.632ⴱⴱ 0.407ⴱⴱ 0.779ⴱⴱ 1.000
8. LO 0.408ⴱⴱ 0.526ⴱⴱ 0.568ⴱⴱ 0.734ⴱⴱ 0.635ⴱⴱ 0.685ⴱⴱ 0.638ⴱⴱ 1.000
Mean 4.033 4.230 4.261 4.297 4.230 4.323 4.408 4.250
SD 1.269 1.110 1.131 1.073 1.022 1.194 1.216 1.176
AVE 0.511 0.724 0.605 0.615 0.636 0.791 0.693 0.586
CCR 0.806 0.913 0.820 0.927 0.913 0.883 0.871 0.876
Notes: ⴱⴱ p ⬍ 0.01; FB (financial bonds); SB (social bonds); STB (structural bonds); UB (utilitarian benefits); SAT (satisfaction); REC (intentions to
recommend); RENEW (intentions to renew the contract); LO (long-term orientation)

Table III Summary of final model estimation results (2SLS)

Predictor variables UB SAT REC RENEW LO
Relational bonds
FB (%) 0.062 (1)
SB (%) 0.458ⴱⴱ (66)
STB (%) 0.166ⴱⴱ (9)

Duration of relationship
DR (%) 0.073 (2)

Interaction terms
FB ⴛ DR (%) ⫺0.004 (0)
SB ⴛ DR (%) ⫺0.239ⴱⴱ (18)
STB ⴛ DR (%) 0.119ⴱ (4)

Evaluations
a
UB 0.523ⴱⴱ 0.492ⴱⴱ 0.424ⴱⴱ 0.544ⴱⴱ
R2 0.410 0.273 0.242 0.180 0.296
F 46.514 178.478 151.448 104.178 199.849
Df 7,469 1,475 1,475 1,475 1,475
p-value 0.000 0.000 0.000 0.000 0.000
Notes: Two-tailed tests: ⴱⴱ p ⱕ 0.01, ⴱ p ⱕ 0.05; standardized coefficients are reported; a denotes the predicted value of the variable; FB (financial
bonds); SB (social bonds); STB (structural bonds); DR (duration of the relationship); UB (utilitarian benefits); SAT (satisfaction); REC (intentions to
recommend); RENEW (intentions to renew the contract); LO (long-term orientation); explained variance shows the relative importance of
predictor variables in the form of a percentage of total explained variance; total explained variance for FP was obtained by summing the
squared betas (standardized coefficients); explained variance attributable to each predictor variable was then calculated by dividing the squared
beta by the total explained variance; values do not sum exactly to 100% due to rounding

DR; STB ⫻ DR). The signs of the interaction terms were the
same as we predicted (a negative sign for SB ⫻ DR and a
positive sign for STB ⫻ DR). Overall, new franchisees
consider social bonds more important than those in long-term
relationships. On the other hand, franchisees in long-term
relationships view structural bonds as more important than
new franchisees.
Aiken and West (1996) suggest that using mean-centered
data in regression with interaction terms may eliminate or
reduce multicollinearity effects. Therefore, we mean-
centered those variables whose interaction terms were
included in the regression analysis by subtracting the mean
of the variable from each case (e.g. three types of relational
bonds and duration of the relationship). For the first
stage regression, mean-centered variables and their
interaction terms were regressed on the perceptions of
utilitarian benefits. Then, a regression for the second stage
was run using the predicted value of the perceptions of
utilitarian benefits.
5.2.3 The effect of perceived utilitarian benefits on relational
outcome variables
H5(a-d) address the effect of perceived utilitarian benefits on
several relational outcome variables. The result shows that
perceptions of utilitarian benefits have a positive impact on
satisfaction judgment (â ⫽ 0.523, p ⬍ 0.01), intentions to

837
 Relational bonding strategies in the franchise industry
Yong-ki Lee et al.
recommend (â ⫽ 0.492, p ⬍ 0.01), intentions to renew the
contract (â ⫽ 0.424, p ⬍ 0.01) and long-term orientation (â ⫽
0.544, p ⬍ 0.01). Hence, H5 is supported.
6. Discussion and managerial implications
This research examined relational bonding strategies in the
franchisor–franchisee relationships and the moderating role of
the duration of the relationship. Unlike prior research, this
study used a relationship marketing approach to examine the
franchisor–franchisee relationships and showed how different
types of relational bonds influence franchisees’ perceptions of
benefits.
6.1 Different relational bonds have a differential effect
on franchisees’ perceptions of benefits
Both social and structural bonds affect franchisees’
perceptions of utilitarian benefits. However, unlike some
previous studies that report that structural bonds explain most
variances in relational outcomes (Chiu et al., 2005; Liang and
Wang, 2008), this study finds that social bonds (66 per cent of
the variance explained) have a greater influence than
structural bonds (9 per cent of the variance explained) on
franchisees’ perceptions. We offer a couple of explanations for
this finding. First, given that this study was performed in a
collectivistic society (South Korea) where social relations and
the relational network play a significant role in conducting
business, the effect of the structural bonds could have been
overshadowed by the more significant role of the social bonds.
Another explanation can be found in the specific context
of the relationships we examined (franchisor–franchisee
relationships). The relationship between a franchisor and the
franchisees is bound by a legal contract. Franchisees that
become structurally tied upon entering the relationship may
take the structural bonds for granted and perceive the
franchisor’s effort to build social bonds as more meaningful.
In contract-bound relationships, franchisees have little
volition over terminating the relationship earlier than specified
and are obligated to stay in the relationship. To cope with this
condition, franchisees may seek ways to enhance the
relationship by focusing on social and emotional bonds toward
the franchisor.
Financial bonds do not have a significant impact on
franchisees’ perceptions of utilitarian benefits. This might
be surprising to some managers and franchisors who believe
in the short-term effect of financial incentives. However,
franchisees tend to have a long-term perspective because of
the nature of the relationship (contract-based). Unlike
consumers, franchisees that are bound by a contract are
subject to high switching costs. Therefore, they may not
view short-term financial incentives as attractive or
appealing as other types of relational bonding strategies. To
sum up, the findings suggest that social bonds can
transcend financial exchanges that occur in the
franchisor-franchisee relationships. This lends empirical
evidence to the notion that financial incentives have no
direct effect on the quality of the relationship (e.g. trust)
(Chiu et al., 2007; Lacey and Morgan, 2009; Liang and
Wang, 2008). Efforts to build social bonds seem to have the
838
Journal of Business & Industrial Marketing
Volume 30 · Number 7 · 2015 · 830 –841
highest return on investment when compared with other
types of relational bonds.
6.2 Social bonds are more important in the early stage
of the relationship, and structural bonds are more
important in the later stage of the relationship
Our result suggests that the duration of the relationship
moderates the effects of relational bonds on franchisees’
perceptions of utilitarian benefits. This finding is consistent
with prior research that suggests that relationships are
context specific. The study result identifies and defines
specific circumstances under which moderating effects may
occur. For example, the duration of the relationship
interacts with social and structural bonds to enhance
franchisees’ perceptions of benefits. The interaction effect
involving social bonds and the duration of the relationship
suggests that franchisees consider social bonds to be more
important in the early stage of the relationship than the later
stage of the relationship. The result suggests that
franchisors may want to customize and adapt their
relational bonding strategies based on relational properties
such as the duration of the relationship. For example,
allocating more resources to the development of social
bonds with new franchisees will be worthwhile. More
frequent visitation and contact may be necessary for those
franchisees that are new to the system. The study result that
franchisees in long-term relationships weigh structural
bonds more heavily lends support to the notion that
structural bonds offer a sustained competitive advantage.
The finding suggests that franchisors continue to strengthen
the relationship by expanding structural solutions and
requiring franchisees to make continuous investments in
the relationship. For example, requirements that involve
building maintenance or system upgrades may strengthen
the structural tie between the two entities.
6.3 Franchisees’ perceptions of benefits are critical
from the long-term perspective
Consistent with prior research (Lam et al., 2004; Lee et al.,
2014) that reports perceived benefits have a positive
influence on the relationship, the current study finds that
franchisees’ perceptions of utilitarian benefits have a
positive influence on satisfaction judgment, intentions to
recommend, intentions to renew the contract and long-term
orientation. According to the social exchange theory, any
social relations involve an exchange of social resources.
Franchisees who perceive utilitarian benefits will engage in
the reciprocation process by taking part in positive
word-of-mouth and renewal of the contract and by adopting
long-term orientation. This finding confirms and supports
prior research (Fiore et al., 2005; Lee et al., 2014) that, to
sustain a relationship, businesses should ensure their
partners perceive utilitarian benefits.
There are several limitations to this study. First, the R2
values for two relational outcome variables were relatively low
because the outcome variables were regressed on only one
predictor variable (predicted value of perceived utilitarian
benefits). Future studies may want to include more predictors
to increase the predictive power. Second, this study focused
on the perceptions of utilitarian benefits. Future studies may
 Relational bonding strategies in the franchise industry
Yong-ki Lee et al.
want to consider the perceived costs in the model to capture
the dynamics between these perceived benefits and perceived
costs. Lastly, this study was conducted in South Korea, which
may limit the generalization of the findings. Future studies
may want to include different countries to explore how
cultural context plays a role in the franchisor–franchisee
relationships.
References
Aiken, L.S. and West, S.G. (1996), Multiple Regression: Testing
and Interpreting Interactions, Sage Publications, Thousand
Oaks, CA.
Anderson, E. and Weitz, B. (1992), “The use of pledges to
build and sustain commitment in distribution channels”,
Journal of Marketing Research, Vol. 29 No. 1, pp. 18-34.
Bauer, H.H., Falk, H. and Hammerschmidt, M. (2006),
“e-TransQual: a transaction process-based approach for
capturing service quality in online shopping”, Journal of
Business Research, Vol. 59 No. 7, pp. 866-875.
Berry, L.L. (1995), “Relationship marketing of services –
growing interest, emerging perspectives”, Journal of the
Academy of Marketing Science, Vol. 23 No. 4, pp. 236-245.
Berry, L.L. and Parasuraman, A. (1991), Marketing
Service-Competing Through Quality, The Free Press, New
York, NY.
Blau, P. (1964), Exchange and Power in Social Life, Wiley, New
York, NY.
Bollen, K. (1989), Structural Equations with Latent Variables,
John Wiley & Sons, New York, NY.
Bolton, R.N. (1998), “A dynamic model of the duration of the
customer’s relationship with a continuous service provider:
the role of satisfaction”, Marketing Science, Vol. 17 No. 1,
pp. 45-65.
Bolton, R.N., Smith, A.K. and Wagner, J. (2003), “Striking
the right balance: designing service to enhance
business-to-business relationships”, Journal of Service
Research, Vol. 5 No. 4, pp. 271-291.
Brown, J.R. and Dev, C.S. (1997), “The franchisor-franchisee
relationship”, Cornell Hotel and Restaurant Administration
Quarterly, Vol. 38 No. 6, pp. 30-38.
Chiu, H., Lee, M., Hsieh, Y. and Chen, L. (2007), “Building
customer relationships: a comparison across multiple
service encounters”, Advances in Consumer Research, Vol. 34
No. 1, pp. 720-725.
Chiu, H.C., Hsieh, Y.C., Li, Y.C. and Lee, M. (2005),
“Relationship marketing and consumer switching behavior”,
Journal of Business Research, Vol. 58 No. 12, pp. 1681-1689.
Churchill, G.A. (1979), “A paradigm for developing better
measures of marketing constructs”, Journal of Marketing
Research, Vol. 16 No. 1, pp. 64-73.
Claro, D.P., Hagelaar, G. and Omta, O. (2003), “The
determinants of relational governance and performance:
how to manage business relationships”, Industrial Marketing
Management, Vol. 32 No. 8, pp. 703-716.
Cochet, O. and Ehrmann, T. (2007), “Preliminary evidence
on the appointment of institutional solutions to franchisor
moral hazard-the case of franchisee councils”, Managerial
and Decision Economics, Vol. 28 No. 1, pp. 41-55.
Coulter, K.S. and Coulter, R.A. (2002), “Determinants of
trust in a service provider: the moderating role of length of
839
Journal of Business & Industrial Marketing
Volume 30 · Number 7 · 2015 · 830 –841
relationship”, Journal of Services Marketing, Vol. 16 No. 1,
pp. 35-50.
Coviello, N. and Brodie, R. (2001), “Contemporary
marketing practices of consumer and business-to-business
firms: how different are they?”, Journal of Business &
Industrial Marketing, Vol. 16 No. 5, pp. 382-400.
Dagger, T.S., Danaher, P.J. and Gibbs, B.J. (2009), “How
often versus how long: the interplay of contact frequency
and relationship duration in customer-reported service
relationship strength”, Journal of Service Research, Vol. 11
No. 4, pp. 371-388.
Donaldson, B. and O’Toole, T. (2000), “Classifying
relationship structures: relationship strength in industrial
markets”, Journal of Business & Industrial Marketing, Vol. 15
No. 7, pp. 491-506.
Dwyer, F.R., Schurr, P.H. and Oh, S. (1987), “Developing
buyer-seller relationships”, Journal of Marketing, Vol. 51
No. 2, pp. 11-27.
Fink, R.C., James, W.L., Hatten, K.J. and Bakstran, L.
(2008), “Supplier strategies to increase customer purchases
over the duration of customer-supplier relationships”,
Journal of Business & Industrial Marketing, Vol. 23 Nos 7/8,
pp. 529-543.
Fiore, A.M., Kim, J. and Lee, H.H. (2005), “Effect of image
interactivity technology on consumer responses toward the
online retailer”, Journal of Interactive Marketing, Vol. 19
No. 3, pp. 38-53.
Ford, D. (1980), “The development of buyer-seller
relationships in industrial markets”, Journal of European
Marketing, Vol. 14 Nos 5/6, pp. 339-353.
Ganesan, S. (1994), “Determinants of long-term orientation
in buyer-seller relationships”, Journal of Marketing, Vol. 58
No. 2, pp. 1-19.
Gassenheimer, J.B., Baucus, D.B. and Baucus, M.S. (1996),
“Cooperative arrangements among entrepreneurs: an
analysis of opportunism and communication in franchise
structures”, Journal of Business Research, Vol. 36 No. 1,
pp. 67-79.
Geyskens, I., Steenkamp, J.B.E. and Kumar, N. (1999), “A
meta-analysis of satisfaction in marketing channel
relationships”, Journal of Marketing Research, Vol. 36 No. 2,
pp. 223-238.
Gounaris, S.P. and Venetis, K. (2002), “Trust in industrial
service relationships: behavioral consequences, antecedents
and the moderating effect of the duration of the
relationship”, Journal of Services Marketing, Vol. 16 No. 7,
pp. 636-655.
Grayson, K. and Ambler, T. (1999), “The dark side of
long-term relationships in marketing services”, Journal of
Marketing Research, Vol. 36 No. 1, pp. 132-141.
Han, J.K., Kim, N. and Srivastava, R.K. (1998), “Market
orientation and organizational performance: is innovation a
missing link?”, Journal of Marketing, Vol. 62 No. 4,
pp. 30-45.
Hing, N. (1995), “Franchisee satisfaction: contributors and
consequences”, Journal of Small Business Management,
Vol. 33 No. 2, pp. 12-25.
Holmberg, S.R. and Morgan, K.B. (2003), “Franchise
turnover and failure: new research and perspectives”,
Journal of Business Venturing, Vol. 18 No. 3, pp. 403-418.
 Relational bonding strategies in the franchise industry
Yong-ki Lee et al.
Im, S., Hussain, M. and Sengupta, S. (2008), “Testing
interaction effects of the dimensions of market orientation
on marketing program creativity”, Journal of Business
Research, Vol. 61 No. 8, pp. 859-867.
KB Daily Knowledge Vitamin (2012), available at: www.kbfg.
com/kbresearch/index.do?alias⫽retirement&viewFunc⫽
default_details&categoryId⫽5&subCtgId⫽&boardId⫽500
&articleId⫽1001346&menuId⫽&tSearch⫽T
Kohli, A.K. and Jaworski, B.J. (1990), “Market orientation:
the construct, research propositions, and managerial
implications”, Journal of Marketing, Vol. 54 No. 2, pp. 1-18.
Kohtamaki, M. and Bourlakis, M. (2012), “Antecedents of
relationship learning in supplier partnerships from the
perspective of an industrial customer: the direct effects
model”, Journal of Business & Industrial Marketing, Vol. 27
No. 4, pp. 299-310.
Kumar, V., Bohling, T.R. and Ladda, R.N. (2003),
“Antecedents and consequences of relationship intention:
implications for transaction and relationship marketing”,
Industrial Marketing Management, Vol. 32 No. 8,
pp. 667-676.
Lacey, R. and Morgan, R.B. (2009), “Customer advocacy and
the impact of B2B loyalty programs”, Journal of Business &
Industrial Marketing, Vol. 24 No. 1, pp. 3-13.
Lam, S.Y., Shankar, V., Erramilli, M.K. and Murthy, B.
(2004), “Customer value, satisfaction, loyalty, and
switching costs: an illustration from a business-to-business
service context”, Journal of the Academy of Marketing Science,
Vol. 32 No. 3, pp. 293-311.
Lawrence, B. and Kaufmann, P.J. (2010), “Franchisee
associations: strategic focus or response to franchisor
opportunism”, Journal of Marketing Channels, Vol. 17 No. 2,
pp. 137-155.
Lawrence, B. and Kaufmann, P.J. (2011), “Identity in
franchise systems: the role of franchisee associations”,
Journal of Retailing, Vol. 8 No. 3, pp. 285-305.
Lee, Y.-K., Kim, S., Lee, C.-K. and Kim, S.H. (2014),
“Impact of mega event on visitors’ attitude toward the
hosting country: using trust transfer theory”, Journal of
Travel & Tourism Marketing, Vol. 31 No. 4, 507-521.
Lee, Y.-K., Kim, Y., Son, M.H. and Lee, D.J. (2011), “Do
emotions play a mediating role in the relationship between
owner leadership styles and manager customer orientation
and performance in service environment?”, International
Journal of Hospitality Management, Vol. 30 No. 4,
pp. 942-952.
Liang, C. and Wang, W. (2008), “Do loyal and more involved
customers reciprocate retailer’s relationship efforts?”,
Journal of Service Research, Vol. 8 No. 1, pp. 63-90.
Lin, N.P., Weng, J.C. and Hsieh, Y.C. (2003), “Relational
bonds and customer’s trust and commitment-a study on the
moderating effects of web site usage”, The Service Industries
Journal, Vol. 23 No. 3, pp. 103-124.
McFarlin, D.B. and Sweeney, P.D. (1992), “Distributive and
procedural justice as predictors of satisfaction with personal
and organizational outcomes”, Academy of Management
Journal, Vol. 35 No. 3, pp. 626-638.
Molm, L.D., Schaefer, D.R. and Collett, J.L. (2007), “The
value of reciprocity”, Social Psychology Quarterly, Vol. 70
No. 2, pp. 199-217.
840
Journal of Business & Industrial Marketing
Volume 30 · Number 7 · 2015 · 830 –841
Moorman, C., Zaltman, G. and Deshpande, R. (1992),
“Relationship between providers and users of market
research: the dynamics of trust within and between
organizations”, Journal of Marketing Research, Vol. 29 No. 3,
pp. 314-328.
Morrison, K.A. (1997), “How franchise job satisfaction and
personality affects performance, organizational commitment,
franchisor relations, and intentions to remain”, Journal of Small
Business Management, Vol. 35 No. 3, pp. 39-67.
Nunnally, J.C. (1978), Psychometric Theory, McGraw-Hill,
New York, NY.
Oliver, R.L. (1980), “A cognitive model of the antecedents
and consequences of satisfaction decisions”, Journal of
Marketing Research, Vol. 17 No. 4, pp. 460-496.
Plakoyiannaki, E. and Saren, M. (2006), “Time and the
customer relationship management process: conceptual and
methodological insights”, Journal of Business & Industrial
Marketing, Vol. 21 No. 4, pp. 218-230.
Prieto, I.M. and Revilla, E. (2006), “Learning capability and
business performance: a non-financial and financial
assessment”, Learning Organization, Vol. 13 No. 2,
pp. 166-185.
Rao, S. and Perry, C. (2002), “Thinking about relationship
marketing: where are we now?”, Journal of Business &
Industrial Marketing, Vol. 17 No. 7, pp. 598-614.
Reinartz, W.J. and Kumar, V. (2000), “On the profitability of
long-life customers in a noncontractual setting: an empirical
investigation and implications for marketing”, Journal of
Marketing, Vol. 64 No. 4, pp. 17-35.
Rust, R.T., Moorman, C. and Dickson, P.R. (2002), “Getting
return on quality: revenue expansion, cost reduction, or
both?”, Journal of Marketing, Vol. 66 No. 4, pp. 7-24.
Sabiote, E.F. and Roman, S. (2009), “The influence of social
regard on the customer–service firm relationship: the
moderating role of length of relationship”, Journal of
Business Psychology, Vol. 24 No. 4, pp. 441-453.
Sweeney, J.C. and Webb, D.A. (2007), “How functional,
psychological, and social relationship benefits influencing
individual and firm commitment to the relationship”,
Journal of Business & Industrial Marketing, Vol. 22 No. 7,
pp. 474-488.
Tao, Y.L., Li, Y. and El-Ansary, A.I. (2008), “The impact of
a distributor’s trust in a supplier and use of control
mechanisms on relational value creation in marketing
channels”, Journal of Business & Industrial Marketing,
Vol. 23 No. 1, pp. 12-22.
Washington Post (2012), “New economic indicator shows
franchise industry growing stronger”, Washington Post,
available at: www.washingtonpost.com/blogs/on-small-
business/post/new-economic-indicator-shows-franchise-
industry-growing-stronger/2012/03/22/glQAjja1VS_blog.
html (accessed 02 October 2013).
White, D.W. (2010), “The impact of marketing strategy
creation style on the formation of a climate of trust in a retail
franchise setting”, European Journal of Marketing, Vol. 44
Nos 1/2, pp. 162-179.
Williams, J.D., Han, S.L. and Qualls, W.J. (1998), “A
conceptual model and study of cross-cultural business
relationships”, Journal of Business Research, Vol. 42 No. 2,
pp. 135-143.
 Relational bonding strategies in the franchise industry Journal of Business & Industrial Marketing
Yong-ki Lee et al. Volume 30 · Number 7 · 2015 · 830 –841

Wilson, D.T. and Jantrania, S. (1995), “Understanding the
value of a relationship”, Asia-Australia Marketing Journal,
Vol. 2 No. 1, pp. 55-66.
Wright, O. and Grace, A. (2011), “Trust and commitment
within franchise systems: an Australian and New Zealand
perspective”, Asia Pacific Journal of Marketing and Logistics,
Vol. 23 No. 4, pp. 486-500.
Yang, Z. and Peterson, R.T. (2004), “Customer perceived
value, satisfaction, and loyalty: the role of switching costs”,
Psychology & Marketing, Vol. 21 No. 10, pp. 799-822.
Yen, D.A. and Barnes, B.R. (2011), “Analyzing stage
and duration of Anglo-Chinese business-to-business
relationships”, Industrial Marketing Management, Vol. 40
No. 3, pp. 346-357.
Zaefarian, G., Henneberg, S. and Naudé, P. (2011),
“Resource acquisition strategies in business relationships”,
Industrial Marketing Management, Vol. 40 No. 6,
pp. 862-874.
Zeithaml, V.A., Berry, L.L. and Parasuraman, A. (1996),
“The behavioral consequences of service quality”, Journal of
Marketing, Vol. 60 No. 2, pp. 31-46.
Further reading
Gwinner, K.P., Gremler, D.D. and Bitner, M.J. (1998),
“Relational benefits in services industries: the customer’s
perspective”, Journal of the Academy of Marketing Science,
Vol. 26 No. 2, pp. 101-114.
Corresponding author
Sally Kim can be contacted at: ykim2@su.edu

For instructions on how to order reprints of this article, please visit our website:
www.emeraldgrouppublishing.com/licensing/reprints.htm
Or contact us for further details: permissions@emeraldinsight.com

841