The impact of marketing strategy creation style on the formation of a climate of trust in a retail franchise setting

Purpose – It is the purpose of this study to demonstrate theoretically and empirically how the marketing strategy creation style implemented by a channel leader in a franchise system impacts the overall climate of trust within the channel system. Specifically, this study seeks to answer two important research questions: should franchisors direct franchisees in prescribed behaviors, or should the franchisees be allowed to play a more fundamental role in the strategy‐making process? How does this decision affect the overall level of trust within the franchise system relationship? Design/methodology/approach – The paper investigates the impact of four common strategy‐making styles in a study of 244 fast food franchise businesses and compares the findings with those previously obtained in other settings. Findings – Support was found for the hypotheses, which stated that the channel climate of franchise systems implementing the symbolic, generative, or transactive modes of strategy‐making would be characterized by a higher degree of trust than would the climate of franchise systems implementing the rational mode. Research limitations/implications – The empirical test considered only one industry (the fast food industry), and only one side of the franchisor‐franchisee dyad (the franchisee's perceptions) was used for the empirical tests. Originality/value – The findings of the paper contribute significantly to an overall understanding of the development of effective, successful franchise channel relationships.