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The purpose of this paper is to provide a methodology by which qualitative analyses serve as rich source materials for discovery of theoretically cogent interrelations between latent variables.

In an illustrative case, qualitative data are collected from US franchisee managers from a single branded franchise of automotive repair outlets. Qualitative analysis of franchisee experiences and attitudes is critical for construction of a causal model used to predict conflict intensity between franchisee managers and franchisors.

The model is based on franchisees' normative expectations for resource allocation within the franchise; and their perceptions of franchisor normative violations, which are determinative of grievances, distrust, and hostility. This theoretical orientation serves to generate a system of interrelated empirically testable propositions.

In principle, the primary limitation of using qualitative analysis for the construction of causal models is the fruitfulness of the theoretical orientation shared by the qualitative analyst and the causal modeler.

The methodological approach advanced in this paper advances qualitative research and causal modeling beyond the individual contributions. Qualitative analysis infuses variables and process imagery into causal modeling. In turn, causal modeling elaborates the qualitative analysis and makes explicit logical connections between variables.

This paper advances a methodology by which qualitative analysis and causal model construction may be usefully integrated. Theory‐based qualitative analysis may be formalized to map latent concepts and their interrelations. Further, operational measures of these concepts may be adduced from the analysis of textual data.