Franchisee-Franchisor Relationship Quality and Its Impact on Restaurants' Operational and Financial Performance: An Application of Leader-Member Exchange Theory

Franchising has evolved as one of the most prevalent business expansion strategies. Essentially, success this strategy depends on dynamic and collaborative relationship between contracting parties (Franchisor Franchisee). A franchising is unique more complicated than conventional relationships because it not only a contractual but also systematic engagement partnership. Hence, there imperative to identify factors that shape influence such relationship. Drawing theory Leader-Member Exchange (LMX), study employed an integrated approach main affecting franchisee-franchisor quality extent their impact operational financial performance franchise restaurants in Egypt. The model was examined based data from (50) local international findings indicated mutual trust, commitment, franchisor support are essential determinants quality. Though three dimensions had varying degrees impact, trust strongest effect. Moreover, results implied franchisors and franchisees direct positive competitive while having indirect overall restaurants. intimate significant theoretical practical implications.