An empirical study of fairness and satisfaction in franchise network: The mediate effect of relationship quality

The purpose of the study is to propose and test the franchisee perception of fairness in maintaining long term relationships between franchisor and franchisee. Data was collected through face-to-face interviews with 157 franchisees. A structural equation modeling was used to the proposed model. The fairness is characterized by the perceived distributive fairness, interactional fairness and procedural fairness while it also tests the effect on the franchise relationship. The findings indicate that there is no significant evidence of interaction fairness on trust and distributive fairness on commitment. However, the perceived procedural fairness has positive effects on trust and commitment. In addition, relationship quality namely trust and commitment, has a significant positive effect on franchisee´s satisfaction. The study also supports that relationship quality plays an important mediating variable in the relationship of the franchisee´s perception of fairness and satisfaction. Managerial and academic implications are delineated and directions for future research are offered.