Abstract—Nowadays, Franchise business is the contribution of income to the economy of developing countries. Especially, among small and medium size enterprises (SMEs) have taken opportunities for developing a business. Hence, the big challenge to franchise system is how to position the business and clearly differentiate it from more competitors. This study is undertaken to investigate the franchisees’ satisfaction, which is a measurement of franchisors’ performance. In particular, how franchisor can better manage their franchisees so as to ensure sustainability of their franchisees. It is also established that the perceived franchisor support mediates the relationship between relationship marketing and franchisors’ performance. 111 Thai franchisors in food and beverage of Thailand, this will match to their franchisees. 80 questionnaires were collected from franchisees that represent a 72.07% response rate. The results of this study have presented evidence that perceived franchisor support (PFS) is the contribution in the franchise business system. The mediating effect of PFS is the key structure of franchisors’ performance to keep in touch for future success in the franchise system. Index Terms—Franchisors’ performance, franchisee satisfaction, perceived franchisor support (PFS) and relationship marketing. I. INTRODUCTION Franchise business is an attractive business for small and medium enterprises (SMEs). The business format of franchise requires the relationship between franchisors and franchisees, as savvy entrepreneurs to take up the challenges of self employment. In Thailand franchise business has been initiated since 1983, it is the main contributor of income and potential to the economy of Thailand. In the economic environment, both franchisors and franchisee can provide a variety of benefits to their business. This study selected the franchisees food and beverage industry to be the sample of the study. This industry has been highly competitive in the franchise business. On the other hand, each year the number of franchises is increasing but at the same time the number of franchise closure is also increasing [1]. One of the main reasons for the closure of the franchisee in Thailand is due to the poor relationship between franchisor and franchisee [2]. This is similar to franchisors who are not concerned with Manuscript received September 15, 2012; revised December 17, 2012. This work was supported in part by the University Sains Malaysia, USM, 11800 Pular Penang, Malaysia. Khanungnit Hnuchek is with Hatyai University, Thailand (e-mail: khanit_k@hotmail.com). Ishak Ismail and Hasnah Haron are with University Sains Malaysia, USM, 11800 Pular Penang, Malaysia (e-mail: iishak@usm.my, hhasnah@usm.my). developing the already established franchisees [3]. Thus, the increase in the failure rate of franchisor is due to the dissatisfaction amongst the franchise holders. Despite franchisee satisfaction is related to franchisee buying behavior, there have been limited attempts to evaluate empirically the factors which contribute to a satisfactory franchise relationship, particularly from the perspective of franchisees and identifies the final stage of the buying process [4]. Therefore, franchisee satisfaction as the biggest predictor of whether a franchisee will recommend their franchisor to a prospective franchisee that is their level of satisfaction with their performance [5]. Thus, this study proposed that relationship marketing contributes positively to franchisors’ performance. Furthermore, this study tests the mediating effect of perceived franchisor support on the relationship between relationship marketing and franchisors’ performance. The results show the strong relationship between the franchisor marketing strategy variables and franchisors’ performance of which is perceived by franchisee satisfaction. The findings are meaningful and useful to small and medium enterprises involved in franchise businesses. These are important and critical knowledge to the success of franchise. II. LITERATURE REVIEW A. Franchisors’ Performance Perceived by Franchisee Satisfaction Organizations have used the performance measurement to implement system in the cooperation management between parties. It often includes issues related to satisfaction of customer and stakeholder. Franchisor Performance also refers to the satisfaction of the franchisee with the services given by its franchisor [6]. Franchisee satisfaction is the extent to which a franchisee is contented with the franchisor as it affects his or her role in the franchise organization. Satisfaction with the franchisor will positively affect franchise performance [7]. Moreover, managerial implications on franchise system show the efficiency operation and customer satisfaction as the indicator of franchisor’s performance [6]. The distribution of franchisee responses for the satisfaction items associated with purchasing and operating a franchised outlet, the measurement of franchisee satisfaction required their appraisal of certain costs and benefits and initial and ongoing franchisee support services provided by franchisors [8]. Being satisfied as the behavior in franchise relationship, franchisees’ satisfaction is contingent upon their expectations. Thus franchisors should focus on the specific dimensions that contribute to franchisees’ dissatisfaction and emphasize Franchisors’ Relationship Marketing and Perceived Franchisor Support on Franchisors’ Performance: A Case of Franchise Food and Beverage in Thailand Khanungnit Hnuchek, Ishak Ismail, and Hasnah Haron Journal of Economics, Business and Management, Vol. 1, No. 1, February 2013 117 DOI: 10.7763/JOEBM.2013.V1.27