||How to Enhance the Performance of the Customer Experience in the Franchising system?
The Paradox of Autonomy
||Department of Business Administration
In service and retailing research, researchers and practitioners pay more attention to customer experience. The literature also suggested that the franchising system should focus on how to manage and create an impressive customer experience. Despite this, scholars are still vague about customer experience, and most research tried to understand the process of creating customer experience from value co-creation or customer participation perspective. However, it is less known that how to manage the creation process of customer experience in the franchising system. Besides, the franchisor may encounter the paradox of the franchisee's autonomy when pursuing the customer experience. That is, when the franchisee has a high degree of autonomy, the franchisor can reduce the cost of monitoring the franchisee. But at the same time, the franchisee may appear to free-riding, which can damage the franchisor's brand value. Conversely, when franchisees do not have the autonomy, they may limit motivation to create customer experience touchpoints, which may damage the benefits of the franchising system. Therefore, this study used the property rights theory to explain the distribution of autonomy in the franchising system, and linked autonomy, customer experience, satisfaction, and loyalty through a two-stage study. The study objectives were the store managers and customers under the franchising system. A total of 71 and 267 valid questionnaires respectively were collected, and SEM was adopted for data analysis. The results of the report showing that customer experience (including brand and interpersonal dimensions) can improve customer satisfaction and customer loyalty under the convenience store. Also, we found that autonomy is nonlinear, especially interpersonal relationship construct with autonomy will affect the performance of customer experience, and there is an inverted U-shaped relationship between autonomy, customer satisfaction, and customer loyalty. It showed that the contribution to customer experience performance will be the best at a medium level. Therefore, this study suggests that franchisees should not insist on strict supervision of franchisees, nor give up maintaining standardization for this purpose. Managers can improve the relationship between franchisors and franchisees, authorizing moderate autonomy, accelerate the customer experience, customer satisfaction and customer loyalty.
Table of contents
List of Tables VI
List of Figures VI
CHAPTER ONE 1
CHAPTER TWO 6
Literature Review 6
2.1. The Effects of the Franchisees’ Autonomy 6
2.2. Elements of Customer Experience 8
2.2.1 Brand Construct 9
2.2.2 Interpersonal Construct 10
2.3 Customer Satisfaction and Loyalty 11
2.4 Conceptual Model in Phase 2 11
CHAPTER THREE 12
Analytical Methodology 12
3.1 Scenario Design 12
3.2 Definition of Construct 16
CHAPTER FOUR 18
Analysis Results 18
4.1 CFA, CR and AVE Analysis 18
4.2 Structural Equation Model 22
4.3 Regression Analysis 24
CHAPTER FIVE 26
CHAPTER SIX 29
List of Tables
Table 1.Three Groups of Franchisees 13
Table 2. Demographic Statistics of Respondents (N=270) 14
Table 3. Definition of construct 17
Table 4. Factor loadings, cronbach’s alpha, average variance extracted, and composite reliabilities explained from confirmatory factor analysis. 19
Table 5. Means, standard deviations, and correlations. 21
Table 6. Hypotheses, Paths, and Coefficients. 23
Table 7. The mediation effect analysis of CUS on the subconstructs of BRE, INE, and CUL 24
Table 8. The Regression Statistics Models 25
Table 9. Summaries of Hypothesis Results 28
Table A 1. Questionnaire for Franchisee’s Autonomy 30
Table A 2. Questionnaire for Customer Experience 31
List of Figures
Figure 1. Conceptual Model in Phase 2 11
Figure 2. The Autonomy of 71 Franchisees 14
Figure 3. The Model of Customer Experience 23
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