Key Indicators to Enhance the Survivability of SMEs’ Franchise Business in EEC
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Abstract
Based on some challenges of the classic belief in the strategic alliance approach, many business sectors utilize it to either creating a competitive advantage or minimizing the risk of business failure, especially in the franchise business. As such, this study’s objective seeks to explore the 3 key indicators in enhancing Franchise Business Survivability (FBS) in the Eastern Economic Corridor (EEC): (1) direct effect of Trust; (2) mediating effect of Relationship Satisfaction (RS), and (3) moderating effect of Commitment. The 400-target SMEs are determined by proportional stratified sampling and collecting data is done by judgment and convenience methods with an on-site questionnaire collection. For data analysis, construct validity is performed by first-order confirmatory factor analysis, and hypothesis testing is performed by multiple regression analysis and Sobel test. The result reveals that Trust and RS are the key indicators in enhancing FBS. On other hand, it is also found that a strong commitment is unable to reinforce RS of both franchisor-franchisee in which contributes to overall franchise business performance. Hence, both franchisor-franchisee should focus on developing a higher level of Trust and RS by providing honest and consistent business operations, while they should avoid misunderstanding and unfair franchise agreements that interrelate to their commitments. Therefore, the result of this study would create an awareness of the key indicators in enhancing the survivability of franchise business and to understand the strategic alliance approach affecting the survivability of Small and Medium Enterprises (SMEs) franchise business in the EEC of Thailand.
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