Correlates of Franchisee Satisfaction: The Case of Saudi Car Dealers

The relationships between sources of power and satisfaction within a franchise are examined by using franchiser-franchisee channel arrangements in Saudi Arabia's automobile market as a case study. The data used were collected through self-administered questionnaires distributed to car dealers in Jeddah, Riyadh, Dammam, and Al-Khobar. Sixty of the 150 questionnaires were returned. By regressing composite instrumentality and effect components of noncoercive and coercive sources of power as well as the aggregate measures on satisfaction, it is found that noncoercive sources are related positively and significantly to franchisee satisfaction. An adaptation of importance-performance analysis is applied to the data, revealing national and local advertising and salesperson training to be the most critical noncoercive sources of power. Dealers are pleased with the car manufacturers' performance in: 1. reputation, 2. mechanic training, and 3. spare parts supply. By offering high quality assistance to their dealers on attributes important to them, manufacturers can increase franchisee satisfaction considerably.