Investigating relationships between relationship quality, customer loyalty and cooperation

Abstract

Purpose Franchised convenience stores successfully operate throughout Taiwan, but the convenience store market is approaching saturation point. This study attempts to empirically examine some important elements (e.g. relationship quality, loyalty, and cooperation) that might promote a successful long‐term franchising relationship between franchisors and franchisees of convenience stores in Taiwan. Design/methodology/approach A total of 500 surveys were mailed to a random sample of convenience stores' franchisees among the four main franchisors in Taiwan. This research first used correlation analysis to explore the associations between the constructs and then used a regression analysis to further explore patterns of associations. Findings The results show that relationship quality is positively correlated with the cooperation between franchisors and franchisees, as well as with franchisee loyalty. Additionally, the cooperative behavior between franchisees and franchisors is significantly correlated with franchisees' loyalty. Research limitations/implications Data were only collected through four key convenience stores' franchise chain systems in Taiwan. To develop a more global perspective, further replications of this study are necessary to examine the stability of our results in other contexts. Practical implications This research has highlighted that small business owners operating in a franchise system should pay attention to the importance of relationship quality, loyalty, and cooperation in stabilizing franchising relationships and enhancing competitive advantage. Originality/value The majority of studies on franchising relationships are conducted in a Western context. To date, there are no studies that explore the interaction between relationship quality, loyalty, and cooperation in a franchising relationship in an Eastern context.