This study is to determine the effect of employees' ethical behaviour on customer satisfaction and retention based on Malaysian fast food restaurants. This study employed a cross-sectional approach in undertaking this research. Data were collected from two fast food facilities namely Kentucky Fried Chicken (KFC) and Burger King. This study collected a sample of 216 through nonprobability sampling technique of convenient sampling from the two outlets. Questionnaires were given out to customers

more »

... o have just exited the said establishments. A questionnaire with a likertscale rating 1-5 was used. To ensure reliability and validity, the questionnaires were first was checked by Cronbach's alpha and principal components analysis through a pilot testing. The correlation analysis shows that the ethical behaviour of employees and the customer satisfaction as well as the customer retention are highly correlated. For the multiple linear regression analysis, all the independents numerical variables were entered. There is a positive and significant impact of employees' ethical behaviour on customer satisfaction and customer retention as well as customers' attitude towards the employees' ethical behaviour. This study is important as it sheds light on the impact of employees' ethical behaviour in the fast food industry in Malaysia and how it affects the customer satisfaction and retention of the outlet or store. Future research should be carried out to evaluate further into this area of study with either more various outlets to study or by using a different measure.