An Empirical Analysis of Franchisee Satisfaction in Malaysia: An Agency Relationship Perspective

This study analyzed six qualitative variables that are hypothesized to influence franchisee satisfaction; i) franchisee’s previous job experience, ii) duration as a franchisee, iii) number of recruited franchisees, iv) businesstypes, v) the franchisor’s policies, vi) the franchisor’s services. The results show no significant differences in franchisee satisfaction among those with previous job experience, duration as a franchisee, number of recruited franchisees and business-types. However, there is a significant weak positive correlation between franchisors’ policies, franchisor’s services and franchisee satisfaction. Conflicts were identified in advertising, procurement, royalty payment, and territorial encroachment. There are also differences in risk aversion between franchisor and franchisee.

Key Words: Franchisor’s characteristics; Franchisor’s actions; Franchisor-franchisee conflict, Franchisee characteristics; Franchisee satisfaction.

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