Franchisee-Franchisor Relationship in Saudi Arabia: Agency Theory Perspective

Abstract

The research investigates franchisee-franchisor relationships in Saudi Arabia using agency theory to analyze agency problems and control perceptions while exploring trust and franchisee satisfaction and conflicts. A survey with 105 franchisees across different industries received analysis through IBM SPSS using frequency distribution alongside Chi-Square tests. The findings reveal significant concerns regarding operational control, trust in franchisors, and information transparency. Yet, no statistically significant relationships were found between trust and satisfaction, power and conflict, or goal alignment and satisfaction. The study findings imply that standard agency issues do not drive franchisee experiences as much as financial security combined with operational backing and legal protective measures. The authors advise franchisors to provide for their franchisees. The government needs to enhance regulatory standards for franchises together with dispute settlement systems to promote equitable contractual obligations. Further investigation using qualitative research methods and studies focusing on specific industries will comprull disclosure, adjustable financial frameworks, and independent marketing and operational capabilities fehensively comprehend Saudi Arabia’s evolving franchising market.