The Joint Effects of Ex Ante Contractual Completeness and Ex Post Governance on Compliance in Franchised Marketing Channels

This study examines the heretofore neglected joint effects of ex ante contractual completeness and ex post governance on compliance in a franchise setting. In contrast to much of the extant literature that views contractual completeness in the aggregate, the present research disaggregates contractual completeness into ex ante monitoring and enforcement completeness, and additionally distinguishes between ex post monitoring and enforcement, allowing for a nuanced examination of the joint effects of different types of ex ante and ex post governance on compliance. Additionally, the authors advance the concept of consummate compliance, thereby complementing the literature, which tends to view compliance solely in terms of perfunctory compliance—an important distinction because the results suggest that perfunctory compliance has a negative relationship with customer satisfaction, whereas consummate compliance has a positive one. Drawing on multiple data sources, the authors demonstrate that ex ante monitoring completeness positively moderates the relationship between ex post monitoring and both types of compliance; however, ex ante enforcement completeness negatively moderates the relationship between ex post enforcement and both types of compliance.