Abstract: The primary purpose of this research is to investigate franchisees satisfaction based on transactional and relational quality from franchisees perspective. The research methods used in this research is qualitative method. The research was conducted on educational franchise industry in Indonesia with franchisees as the unit analysis. This study utilize online questionnaire by taking a sample using simple random sampling. Data analysis was performed by using of Structural Equation Model (SEM) and processing using program Warp PLS 3.0. Results of this study stated that in the hypothetical sample of education franchise industry in Indonesia, the relationship of transactional quality determines the relational quality. This finding had successfully proven a fact that relational quality in franchising is influenced by the transactional quality. Further, finding showed that both of transactional and relational quality affects franchisees satisfaction, however the effect of the relational quality is greater than the effect of transactional quality. The study offers valuable insight for strategic management especially for franchising business, for a better relationship between franchisor and franchisee. This research is particularly valuable to franchisor and franchisee for expanding their franchising business.