Measuring fairness in franchisor-franchisee relationship: a confirmatory approach

Purpose The purpose of this paper is to develop, test and validate a measure of fairness in the context of franchisor-franchisee relationship and test for the dimensionality of fairness. Design/methodology/approach The authors surveyed 300 franchisees of a large-scale franchisor in India. The authors employ confirmatory factor analysis (CFA) to analyse the data. Findings The authors tested four models of the fairness construct through CFA using structural equation modelling. The three-factor corrected model of the fairness construct exhibits comparatively better goodness of fit indices as compared to the other correlated models of the fairness construct. It clears the threshold level of validity and reliability test. The findings of the study suggest that the factor structure of fairness is three-factor correlated model with aspects of procedural fairness and informational fairness getting subsumed into one construct. Research limitations/implications Factor structure of fairness construct differs with earlier empirical research findings with both interpersonal fairness and informational fairness subsuming into each other to form one construct. Practical implications This measure can be utilized by franchisee managers to track perceptions of fairness among franchisees to manage the franchise relationship in a better way. Franchisees expect information sharing from the franchisor and not the representative of the franchisor. Originality/value To the best of the authors’ knowledge, this study is the first to develop a valid and reliable measure of fairness construct in the context of franchise relationship. This study also identifies factor structure of fairness construct.