Franchising and Greenwashing in Hospitality Firms: The Moderating Role of Brand Reputation

As environmental, social, and governance (ESG) issues have gained significant attention in the hospitality industry, firms are increasingly adopting ESG disclosures. However, the gap between symbolic communication and actual performance—commonly referred to as greenwashing—poses reputational and regulatory risks. Drawing on agency and institutional theories, this study examines the impact of franchising on greenwashing behavior in the restaurant industry. In addition, it investigates how brand reputation, measured by advertising intensity, moderates this relationship. Using panel data from 2000 to 2024, the study employs a generalized estimating equations (GEE) model. The findings reveal that a higher franchising ratio is positively associated with restaurant firms’ greenwashing behavior, whereas stronger brand reputation mitigates this effect. In other words, franchising tends to weaken operational control and heighten information asymmetry, encouraging symbolic ESG communication, while strong brand reputation enhances stakeholder monitoring and reduces greenwashing. These results offer meaningful implications for corporate governance, brand management, and sustainable strategy in the restaurant industry.