الهه نصیری

The present study aimed to investigate the effects of franchise contract components on maintaining sales leadership in Iran’s retail industry. Sales leadership refers to achieving and sustaining a brand’s competitive position in the market and plays a crucial role in increasing market share, attracting loyal customers, and recruiting high-quality franchisees. Considering the significance of franchise contracts in defining the relationship between franchisors and franchisees, this study focused on two main contractual dimensions: cost structure (royalty fee, initial entry fee, and initial investment) and contractual incentives (multi-unit expansion and financial support).

The statistical population comprised senior and middle managers of Gandom chain stores in Tehran, selected due to limited access to Ofogh Kourosh stores. The research sample included ۴۷ stores, and with at least three managers completing the questionnaire in each store, a total of ۱۴۲ valid responses were collected. Data analysis was performed using descriptive statistics, normality tests, Pearson’s correlation coefficient, and multiple linear regression analysis.

The findings revealed that none of the cost structure variables—royalty fee, entry fee, and initial investment—had a significant effect on sales leadership. In contrast, the financial support component, as part of contractual incentives, demonstrated a positive and significant relationship with maintaining sales leadership and was the only influential factor identified in the sample. Moreover, the hypothesis related to the management system was excluded from the final analysis, as it was determined not to be a direct contractual element and had no significant impact on sales leadership.

These results suggest that, in the Iranian market, direct financial support to franchisees plays a vital role in maintaining a brand’s competitive position, while other cost-related elements alone do not exert a considerable influence. From a managerial perspective, this study provides practical implications for chain brand managers to design supportive and incentive-based contracts, optimize franchisee investments, and promote sustainable franchise network development.

Beyond addressing a research gap regarding sales leadership retention in emerging markets, the study offers a credible scientific foundation for managers and policymakers to make informed decisions when designing and implementing franchise contracts.

Keywords: Franchise contract; cost structure; contractual incentives; sales leadership retention; retail industry; Gandom.