Mediating Effects of Relationship Fairness Between Franchisor"s Support Service and Performance in Food Service Franchise

Abstract

This paper investigates the mediating effects of relationship fairness factors between franchisors’ support services and franchisees’ performance. Fairness is measured using constructs of distributive, procedure, interaction, and information, franchisors’ support service is divided into initial support services and continuous support services, and performance (re-contract intention) is measured using re-contract, contract extension, and recommendation. Our findings are fourfold. First, initial support service has a significant impact on other fairness concerns, excluding distributive fairness, and support service improvement can increase perceived fairness in the franchisor–franchisee relationship. Second, procedural, and informational fairness have a positive and significant impact on franchisees’ re-contract intention. This indicates that information sharing between franchisors and franchisees must be transparent in accordance with consistent established procedures. Third, only information fairness is found to have a partial mediating effect between continuous support services and performance, and continuous support service indirectly positively affects re-contract intention through relationship fairness. Fourth, there are differences between global and domestic franchises in the impact of continuous support services on relationship fairness, as global franchises’ continuous support service appears to have a greater effect on the relationship fairness, which should be considered for global competitiveness.