The changing role of encroachment:
how does this affect franchisee satisfaction with e-commerce?
Master Thesis
MSc Business Administration - Small Business & Entrepreneurship
Faculty of Economics & Business
University of Groningen
Jelle Slump
S2974703
Thesis supervisor: dr. M.J. Brand
Co-assessor: dr. M. Wyrwich
June 2019
1
Abstract
The advent of the internet provides companies with numerous advantages, but not every aspect has positive effects. An increasing number of conflicts takes place between franchisors and franchisees about the use of e-commerce. Encroachment is the main cause of conflict, since customers buy relatively more products online and consequently are less likely to show up in the stores. Franchisees are often dissatisfied with the distribution of costs and revenue of the online store and feel encroached by the franchisor. Different forms of encroachment are identified in this study and an attempt was made to measure this concept. This study investigates the role that encroachment plays regarding franchisee satisfaction with e-commerce. Since existing literature proves that distributive justice and procedural justice have a positive impact on franchisee satisfaction, it is hypothesized that these two variables will attenuate the negative relationship between encroachment and franchisee satisfaction. The hypotheses are tested with data from 840 franchisees originating from five different supermarkets. The results do not prove the expected negative relationship between encroachment and satisfaction. This therefore excludes a potential moderating role of procedural and distributive justice. Further research is needed to validate the encroachment scales even further and must show why encroachment was not significant in this study.
2
Table of Contents
Introduction ... 4 Literature review ... 7 Franchising ... 7 E-commerce ... 8 Encroachment ... 9Fairness and Justice ... 11
Franchisee satisfaction ... 13
Hypotheses ... 14
Conceptual model ... 16
Methodology ... 17
Data and sample ... 17
Measures ... 18
Distributive justice ... 18
Procedural justice. ... 18
Franchisee satisfaction regarding e-commerce. ... 19
4
Introduction
The importance of electronic activities for companies is obvious nowadays. More and more companies choose to add electronic activities to their portfolio. The growing number of customers that buys online plays an important role in this trend (Soni & Verghese, 2018). Furthermore, there is a growing amount of franchise formulas in the world (Nijmeijer, Fabbricotti, & Huisman, 2014). The amount of franchise formulas in the Netherlands, for example, rose around 4% in 2017 in comparison with the years before (NFV, 2019).
Franchising can be considered as a contractual agreement between two parties, the franchisor and the franchisee, whereby the franchisee pays the franchisor for the entitlement to sell products and services on behalf of the franchisor (Watson, Stanworth, Healeas, Purdy, & Stanworth, 2005; Nijmeijer et al., 2014; Combs, Michael, & Castrogiovanni, 2004). The most well-known form of franchising is business format franchising and this form will be used in this study. Business format franchising means that the franchisee not only pays to use the products and/or services of the franchisor, but that the franchisee is authorized to more or less replicate the whole format (Croonen, 2010). In order to protect the franchisee in this relationship, the franchisor usually allows the franchisee exclusive territory. This means that only the franchisee is allowed to operate in a certain geographical area without interference of new company-owned stores or new franchisees from the same company.
An interesting field of research emerges at the intersection of e-commerce and franchising: e-commerce in a franchise context. Multiple studies have been conducted that examined the influence of the rise of e-commerce on franchising. These articles were for example focused on e-commerce strategy (Perrigot & Pénard, 2013), franchising law (Antonsson & Fernlund, 2006; Krawczyk, 2006), and e-encroachment (Cliquet & Voropanova, 2016). However, the literature on e-commerce in a franchise network is still scarce at the moment. This is remarkable since the use of e-commerce increased significantly (Pénard & Perrigot, 2017). Furthermore, a number of court cases took place in the Netherlands between franchisors and franchisees where e-commerce was subject of dispute (District court Amsterdam, 2018). These recent developments show the vital role that e-commerce plays and acknowledge that it is useful to study this topic.
5
During the implementation of e-commerce, encroachment is not always perceived as fair by the franchisee. The fairness/justice principle seems to be an important aspect in the franchisor-franchisee relationship, according to multiple studies (Croonen, 2010; Shaikh, Sharma, Vijayalakshmi, & Yadav, 2018; Shockley & Turner, 2016). Both Shaikh (2016) and Shockley and Turner (2016) argue that the fairness perceived by the franchisee is an essential condition to develop a good and trusting relationship between the franchisee and the franchisor. This means that the satisfaction of the franchisee depends on whether the franchisee believes that he/she has a fair relationship with the franchisor. In this study, two types of justice will be discussed: distributive and procedural justice.
It has become clear that encroachment and justice play a vital role in the relationship between franchisor and franchisee. However, until this moment scholars have failed to study the influence of encroachment on franchisee satisfaction. The existing literature is focused on fairness and encroachment in a normal or even outdated franchise context and is rarely applied in an e-commerce context. During the implementation of e-commerce there are other factors involved than in a normal franchise context, which makes it crucial to study this.
To conclude, there is a general scarcity in research about franchising in an e-commerce context. The interpretation of encroachment is diverse, since no consistency exists about the different types of encroachment. As a consequence, there is a lack of understanding about the e-commerce implementation process and what role fairness and satisfaction play during this process. This research will try to fill this gap, because existing literature and recent developments show us that the aforesaid topics are important in the modern franchise world.
Next to the academic relevance, this topic can be of genuine practical interest for both franchisees and franchisors. In the changing environment where e-commerce becomes more and more important there is an increased likelihood of conflict between the franchisor and the franchisee. With the advent of e-encroachment it is of utmost importance that both franchisor and franchisee are aware of the impact that e-encroachment can have on the relationship. As the literature already pointed out, fairness/justice is an essential condition for a trusting relationship, which makes this an important concept that cannot be neglected. More understanding for the interest of the other party could conceivably increase the survival rate of the individual franchisee but could also increase the viability of the entire franchise system.
6
RQ1: What role does encroachment play regarding franchisee satisfaction during the implementation of e-commerce?
7
Literature review
In the next section, the most important concepts are defined, and relevant theory is discussed. First of all, franchising is defined since this forms the foundation of this research. Hereafter e-commerce is defined and discussed in order to outline the background of this research. Finally, encroachment, justice/fairness, and franchisee satisfaction are defined and discussed. The hypotheses will eventually originate from these three variables.
Franchising
Franchising can be considered as a hybrid organizational form. It falls in between two extremes: market exchange and vertical integration (Norton, 1988). Franchising is characterized by more control than market exchange but is less inhouse than full vertical integration (hierarchy).
Franchisors have different arguments to choose for franchised instead of company-owned stores. One of those arguments is based on the agent-principal relationship, which originates from the agency theory. Eisenhardt (1989) defined this theory in the following way: “agency theory is directed at the ubiquitous agency relationship, in which one party (the principal) delegates work to another (the agent), who performs that work”. Normally this agent-principal relationship is between an employer and an employee and a lot of monitoring costs are involved for the employer to keep track of the activities of the employee. Companies choose to franchise instead of having company owned units in order to lower those monitoring costs.
In a franchise relationship, the agent (the franchisee) has more incentive to work hard and make the company better, because it is in his or her interest that the company performs well. The main reason for this increased incentive is that the franchisee, the agent in this relationship, must invest in order to participate in the formula. Most investments are relationship-specific which are sunk when the relationship fails or is terminated (Bordonaba-Juste & Polo-Redondo, 2008). Examples of such investments are machinery or company-specific equipment, which cannot be used outside the relationship. Furthermore, the franchised store has to have a similar layout and appearance as the other stores of the company. Next to those relationship-specific resources the franchisees normally do not have a fixed salary, but their income is dependent on how their own franchise store is performing. Thus, participating in a franchise formula makes the franchisee more committed and will eventually reduce the monitoring costs, because both the franchisee and the franchisor have the same goals (Shane, 1996). The reduction of the monitoring costs is an important argument for franchisors to choose for franchising, but why is franchising such an attractive form of business for franchisees?
8
Next to the monetary benefits that franchising can offer, there are several advantages based on the supportive environment that the franchisor shapes. A new firm often lacks the experience and knowledge to compete in the right way. The knowledge and market experience of the franchisor can potentially serve as a vital resource for the newly starting franchisee (Tuunanen & Hyrsy, 2001).
The focus of this study will be on a particular form of franchising: business format franchising. This is the most well-known and most frequently used form of franchising. Business format franchising entails that the franchisee is licensed to copy the whole format of the franchisor. This means that the name, the trademarks, the business plan and all the internal systems and processes can be used by the franchisee, in return for a certain amount of money (Kaufmann & Eroglu, 1999; Castrogiovanni, Combs, & Justis, 2006; Kalnins, 2004).
E-commerce
E-commerce includes electronic activities like the possibility to share information, manage (business) relationships and the opportunity to buy and sell products and services (Zwass, 2003). In a franchise context the purchases and sales frequently take place via a transactional website like an online shop, because this is the most convenient solution for customers (Perrigot & Pénard, 2013).
There are obviously multiple benefits of the use of e-commerce. The internet can provide companies with new economic opportunities and can even function as an extra, alternative distribution channel (Verhoest & Hawkins, 2001; Zhang, Farris, Irvin, Kushwaha, Steenburgh, & Weitz, 2010). This alternative distribution channel is seen as such a conventional thing that franchise concepts that lack a website or fail to provide customers with an online shopping channel are considered as rare and odd (Franson & DeSmith, 2005). Furthermore, the internet plays an important role in the creation of brand awareness. Online activity can be a powerful method to advertise and promote the company’s products and services (Trice, 2001). In addition to the promotional function the internet can also serve as an important social media function. With the help of the internet, franchisors are able to stay in touch with franchisees and suppliers more easily (Plave and Amolsch, 2000).
9
most likely buy their products or services online from now on. Encroachment will be discussed in detail in the next section.
Furthermore, it is difficult for franchisees to protect themselves against the e-commerce activities of the franchisor. According to the legislation of the European Commission, the internet is not a physical (active) sales channel, but a (passive) “sales protocol” (Abell & Bird, 2016). As a consequence, the franchisor is free to use the internet as an alternative distribution channel despite territorial exclusivity (Pénard & Perrigot, 2017). Due to the fact that territorial exclusivity is so difficult to protect at the moment, it is even more important to have a better understanding of justice and satisfaction in the franchise relationship.
Encroachment
Encroachment in a very basic way is the notion that something that belongs to an individual is threatened by somebody else. Encroachment comes in multiple forms, which makes it difficult to develop a good understanding of this concept. Researchers in general agree that there is a most common form, territorial encroachment. In a franchising context this form of encroachment means that either the franchisor opens a new company-owned store, or the franchisor allows a new franchisee to open a store in the geographical proximity of an existing franchisee (Emerson, 2010). As a result, the existing local franchisee potentially loses existing customers as an effect of the opening of the new store. As one can imagine this practice of the franchisor can potentially cause problems. Territorial encroachment is even considered as the biggest problem for franchisees (Emerson, 2010).
The majority of the encroachment literature is focused on territorial encroachment, but there are more types. This research tries to restructure the encroachment literature by applying the five forces model of Porter (1979) to this concept. The five forces model is originally meant to describe the forces that a company can face when it is in a certain market. The five forces are the following: substitutes, new entrants, buyers, suppliers, and competition. Since the five forces model is not devised to serve as a source of forms of encroachment, not all the forces will apply to the encroachment concept. The factors that apply, in my opinion, are suppliers, substitutes and new entrants. The other two forces of Porter are less relevant, because encroachment from buyers is unlikely unless they decide to vertically integrate and enter the market, and encroachment from competition inside the market cannot be considered as a true form of encroachment.
10
same company or brand as the “closest substitutes”, which explains why the entrance of a new unit of a particular brand will result in a higher loss for that same brand, than for stores of another brand. We will consider this form of encroachment as a part of territorial encroachment, since it is very similar to territorial encroachment and differs too little to be considered as a separate form. In the third place, when new firms enter the market this will increase the competition in the market and possibly decrease the market share and the amount of sales. This form can be defined as entrance encroachment. To conclude, we can state that there are three different types of encroachment: territorial, supplier, and entrance encroachment.
The main question is: why would a franchisor open new stores if it knows that the existing franchisees will suffer from this decision? When the franchisor and the franchisee start their ‘relationship’, they both have an incentive to start off on the right foot. In the beginning their goals will be the same and the interests will be well aligned. Both sides will seek to maximize sales, create brand awareness, and enter new markets. However, the relationship will evolve over time which means that their interests might not align anymore (Emerson, 2010). The main goal for the franchisee is to survive, whereas the franchisor is more concerned with the profitability of the entire franchise system. The goal of the franchisor is also referred to as system expansion, which means that the franchisor tries to expand the entire brand and therefore loses it focus on the individual franchisee. When the franchisor opens a new store the franchisee probably feels threatened by the proximity of the new entrant, while the franchisor sees the entrance of the new store as an opportunity to expand market share and increase brand awareness (De Mergelina, Karp, & Pearce, 2015). The franchisor benefits greatly from opening new stores, since these new branches generate income due to the associated license costs and royalties (Emerson, 2010). The franchisor will continue to open new stores or allowing new franchised owned stores, as long as the gains for the franchisor from these new stores outweigh the revenue losses of the current franchisees (Kalnins, 2004).
As already mentioned before, the original encroachment principle is subject to change. With the rise of the internet and the world wide web, e-commerce becomes more and more important. This also has consequences for the influence of encroachment since this poses a different threat in an e-commerce context. In the original definition encroachment applied to individual cases, while e-encroachment concerns multiple franchisees. The use of an online store enables the franchisor to encroach on the territories of multiple franchisees simultaneously. Transactional websites often have a national coverage which can result in a loss of customers for local franchisees. It is not self-evident anymore that customers turn up in the store, since they have the possibility to buy their products and services online.
11
warehouse instead of the warehouse of the local franchisee, the effect of e-encroachment is relatively high. The franchisee will lose customers in his/her physical stores as the online purchases are centrally organized by the franchisor.
Nevertheless, it is important to emphasize that even if (e-)encroachment appears, it is not always considered as a problem by the franchisee. Whether it is identified as a problem depends on how the franchisor and the franchisee cope with the encroachment situation. In case the franchisor deliberately chooses to compensate the local franchisee for the potential losses he/she would face, the franchisor is able to avoid the problem. However, in case the franchisor does not make up for the potential loss of customers as a result of the (e-)encroachment, it is indeed considered as a problem.
The aforementioned exclusive territory plays a different role with regard to e-encroachment, as opposed to the original encroachment principle. As already indicated in the previous section about e-commerce, exclusivity is not applicable when it concerns online sales. The EU law does not consider a website as a violation of the territorial exclusivity. The European Commission considers a website that not targets a specific region as a form of passive selling instead of active selling (Abell & Bird, 2016). This means that restricting this form of selling is anti-competitive and forbidden. This makes it more difficult for a franchisee to enforce its own exclusive territory, when it is threatened by e-encroachment. All in all, we can ascertain that the advent of the internet changed the interpretation and consequences of encroachment. Initially, three forms of encroachment existed, of which territorial encroachment constituted the most dominant one. However, e-encroachment has proven itself a worthy fourth form. Encroachment in an e-commerce context is now called e-encroachment, but this term does not entirely cover the subject. I propose to call this type of encroachment distribution encroachment, since the franchisor encroaches the franchisee by offering products and/or services through other, alternative distribution channels as the internet. As a consequence, the franchisee will potentially lose customers who will make use of those alternative distribution channels.
In conclusion, we can state that the current literature on encroachment has a main focus on traditional encroachment, while the e-commerce context remains underexposed. In this paper, four different types of encroachment are distinguished: territorial encroachment, supplier encroachment, entrance encroachment, and distribution encroachment. Especially distribution encroachment emphasizes the important role that e-commerce nowadays plays. This form of encroachment will therefore be used in the remainder of this thesis.
Fairness and Justice
12
by Leventhal (1976) the research focus shifted to procedural justice. Leventhal (1976) argued that equity theory ignored the fairness of procedure. In Leventhal’s opinion the fairness construct is multidimensional, while equity theory considers a unidimensional concept by only focusing on distributive justice. Therefore, two justice rules instead of one were proposed: distribution rules and procedural rules. Later, researchers tried to add interactional justice as a third type of justice. This results in a threefold division of the fairness or justice principle: distributive, procedural and interactional justice.
Distributive justice is the perceived fairness of outcomes, while procedural justice concerns the perceived fairness of the procedures that are used (Cohen-Charash & Spector). Interactional justice is used by some authors in addition to these two types (Croonen, 2010; Narasimhan, Narayanan, & Srinivasan, 2013). This form is more personal and entails how the communication and relations between two parties influence the perceived justice.
In this research the view of Leventhal (1976) will be leading and the focus will lie on distributive and procedural justice. Interactional justice will be ignored for two main reasons. First of all, scholars agree that there is a clear-cut distinction between distributive and procedural justice, while there is no agreement about the dissimilarity of procedural and interactional justice (Cohen-Charash & Spector, 2001). This makes it difficult to measure two separate and truly independent variables. Secondly, distributive and procedural justice make more sense in the context of this research than interactional justice. During and after the implementation of e-commerce the procedures and outcomes play a vital role, while interactional justice has a smaller impact. It is more important to consider whether the outcomes and the procedure of e-commerce implementation are perceived as fair by the franchisee than whether the interpersonal relations are considered as fair or not.
Distributive justice can be defined as the fairness of decisional outcomes, as perceived by the actor that is affected by this decision (Colquitt, 2001; Croonen, 2010). Equity plays an important role since individuals use their input/output ratio to compare their own outcomes with the outcomes of other actors, as the equity theory of Adams (1965) already illustrated (Colquitt, 2001). If the actors perceive this ratio as similar, their distributive justice will be high. If not, their distributive justice will be rather low. In this research distributive justice is mainly about the allocation of benefits and costs of the implementation of commerce. In other words, it is about whether the costs and benefits of the e-commerce implementation are, according to the perception of the franchisee, distributed fairly among the different franchisees and the franchisor itself or not.
13
rule, the correctability rule, the representativeness rule, and the ethicality rule. These rules are interpreted in the following way:
- The consistency rule: entails that the procedures should be consistent over time and the same for every person. In the context of this research it means that the procedures should be the same for every franchisee (Croonen, 2010).
- The bias-suppression rule: means that a person’s self-interest should be absent from the allocation procedure. This means that the franchisor should remain objective in the allocation process and that he or she should avoid relying on their own perception and interests.
- The accuracy rule: meant to assure that the most accurate and reliable information is used in the allocation procedure.
- The correctability rule: this rule acknowledges that mistakes and errors can occur but insists that there should be an opportunity to correct that mistake.
- The representativeness rule: aims at involving all relevant stakeholders in the procedure. This means that the wants, needs and interests of the parties that are affected by the allocation procedure should be taken into account. Leventhal (1976) stresses the importance of participatory decision making, which results in a higher perceived fairness because the parties have more control over the allocation process. In a franchising context this means that the franchisor should consider the interests of the different franchisees.
- Ethicality rule: means that the allocation procedure should be in line with the moral and ethical values of the affected parties. In a franchising context, the franchisor should take decisions that are in line with the moral and ethical values of the franchisees.
Franchisee satisfaction
Franchisee satisfaction can be considered as the extent to which the franchisee is pleased with the relationship with the franchisor. This depends on whether there is a trusting, equal, and honest relationship between the two parties (Grace, Weaven, Frazer, & Giddings, 2013). Furthermore, franchisee satisfaction depends on whether the expectations of the franchisee about the relationship with the franchisor are met. It can therefore be argued that when the franchise system or the franchisor is capable of fulfilling the expectations of the franchisee, this franchisee in turn will be more satisfied with the system and the franchisor (Davies, Lassar, Manolis, Prince, & Winsor, 2011; Chiou & Droge, 2015).
14
franchisees will have a great and positive impact on the entire franchise system. These franchisees will be more successful and more committed to the business of the franchisor, which eventually will lead to improvements for the franchisor (Kalargyrou, Aliouche, & Schlentrich, 2018). The main question for the franchisor now is: how am I able to satisfy my franchisee(s)?
In order to live up to the expectations of the franchisee and increase the extent of satisfaction, it is important for the franchisor to coordinate and communicate the objectives of both parties and make sure that these correspond (Davies et al., 2011). When the franchisor clearly communicates with the franchisee and makes him/her aware of the goals of the franchisor, this will positively influence the commitment of the franchisee to follow these goals (Chiou, Hsieh, & Yang, 2004). Furthermore, coordination will create mutual understanding and the belief that everyone’s objectives can be reached. As a consequence, the risk of conflict will decrease which in turn will increase the satisfaction of both the franchisor and the franchisee (Anderson & Narus, 1990).
However, the uniformity of the objectives of the franchisor and the franchisee is not self-evident, as evidence in the encroachment section already proved (Emerson, 2010). Since the objectives are sometimes conflicting, it makes it very hard to align them (Dant & Nasser, 1998; Michael & Combs, 2008). However, there will be major benefits if the franchisor is able to accomplish matching goals. The franchisee will feel appreciated and will be more satisfied as a result of the respect and attention they get from the franchisor (Bordonaba-Juste & Polo-Redondo, 2008).
Hypotheses
Considering each concept that is discussed in this literature review, there are some interesting relationships worthwhile researching. Since distribution encroachment is generally considered as a source of conflict in a franchise relationship, it is expected to influence the extent of satisfaction with e-commerce of the parties. The satisfaction of the franchisor regarding e-e-commerce will conceivably increase, since the franchisor deliberately chooses to make use of an alternative, online distribution channel. The satisfaction of the franchisee regarding e-commerce will conceivably decrease, because he/she will potentially lose customers and sales due to the new online transactional website. Since the focus of this research lies on perceived satisfaction of the franchisee, I propose the following hypothesis:
Hypothesis 1: Franchisee’s perceived encroachment will negatively influence franchisee’s satisfaction regarding e-commerce
15
Distributive justice is, as already indicated before, mostly influenced by equity theory. This means that people are less satisfied with the outcomes if they perceive them as inequitable (Tekleab et al., 2005). Distributive justice in a franchise context means that the evaluation of the franchisee concerning the equality of the outputs will influence their satisfaction (Davies et al., 2011). During the implementation of e-commerce, the distribution of outcomes is more important than ever. If the costs and benefits of the e-commerce activities are not shared based on the input ratio of both the franchisor and the franchisee, this will lead to inequality and less franchisee satisfaction regarding e-commerce.
However, this research will not focus on the direct relationship of justice on satisfaction. Since distributive justice has such a positive influence on franchisee satisfaction, we propose that this justice type can attenuate the negative relationship between distribution encroachment and franchisee satisfaction regarding e-commerce. As already stated in hypothesis 1, high perceived encroachment by the franchisee will result in a lower franchisee satisfaction regarding e-commerce. However, if the franchisor makes sure that the distribution of outcomes is fair and in correspondence with the efforts of the franchisee, this negative encroachment effect will potentially attenuate. This therefore leads to the second hypothesis:
Hypothesis 2: Distributive justice positively moderates the negative relationship between franchisee’s perceived encroachment and franchisee satisfaction regarding e-commerce
As previously mentioned, procedural justice has a positive influence on franchisee satisfaction as well (Grace et al., 2013; McFarlin & Sweeney, 1992). When procedural justice is higher, the franchisee will perceive the used criteria in the allocation procedure as fair, which in turn will increase the satisfaction. During the implementation of e-commerce, these procedures are very important. The implementation of e-commerce is not just a short, unilateral decision by the franchisor, but in most situations an entire development trajectory is involved. We expect that procedural justice is, just like distributive justice, able to attenuate the negative relationship between perceived distribution encroachment and franchisee satisfaction regarding e-commerce. When the procedures regarding the implementation of e-commerce are perceived as fair, the franchisee will be more inclined to accept the decision. This, in turn, will positively influence their extent of satisfaction. This therefore leads to the third hypothesis:
16 Conceptual model
17
Methodology
Data and sample
This research is of quantitative nature which means that surveys are used to collect the data and that hypotheses can be tested after an analysis of the data. Many of the questions that are used in these surveys originate from existing literature, which should improve the reliability and validity of the items. The data that will be used in this study are collected this year and based on a master thesis from last year from the same faculty (Pars, 2018). In the thesis from 2018 questions are asked about both franchisee satisfaction and justice types, but the relationship between these two concepts has not been studied. The data from 2019 will be used to analyze the hypotheses, while the data from 2018 will be useful to determine the representativeness of the sample.
The thesis of Pars (2018) targeted franchisees within the supermarket industry in the Netherlands. To improve the consistency of the data and control for both industry and country differences, franchisees in the same industry in the Netherlands are targeted again in this study, with the exception of franchisees that already completed the questionnaire in 2018. It is essential that the respondents are actually (independent) franchisees in the franchise system, instead of managers from a company-owned store, otherwise it is not possible to draw concrete conclusions. Pars (2018) targeted three franchise systems, while this year’s sample adds franchisees from Albert Heijn and Jumbo to the target group.
The data of the franchisees that are surveyed are collected with help of the software of Qualtrics. This program allows the user to make online questionnaires which make the data collection for both the respondent and the researcher more convenient. The different franchisees are invited to participate in this study by mail. The data collection process was carried out during the last two weeks of May 2019 and the first week of June 2019. The target sample size consisted of 840 franchisees, as shown in table 1. Eventually the total number of valid responses was 104, which represents a response rate of 12.38%.
Table 1 Distribution of 2019
Franchise formula # of respondents # of emails Response rate Completion rate
18
This year, a control question was included at the start of the questionnaire. This question made sure whether the franchise system had an online store at their disposal where they could sell products. If respondents indicated that their formula did not exploit such a store the questionnaire ended, since it is meaningless to complete the questionnaire at that point. Of the 104 respondents, a total of 8 (7.69%) indicated that they did not have an online store, which meant the end of their contribution to this research.
After the data collection period it is important to check whether there are no data entered in a wrong way. If that is the case the data must be cleaned up first, before the statistical analysis can be done. A total number of 74% (77 respondents) completed the questionnaire, where 26% (26 respondents) failed to do so. This does not mean that the 26 cases that are not complete have to be deleted from the dataset. Missing data are no problem, since the statistical program (SPSS) that will be used in this study will take care of that in the analysis. SPSS is able to filter out the ones that were not completely filled in per item. Deleting the 26 cases would deprive oneself of the opportunity to use the questions that these respondents did fill in. After exclusion of cases that had wrong or irrelevant values 104 respondents remain, which could be used in the analysis.
Measures
In this section, the measures of the variables that are used in this study are explained in detail. The variables in this study are partly measured with items that are used before and partly with newly developed items. An overview of all the relevant measurements can be found in appendix A.
Distributive justice. The items of distributive justice are not derived from existing literature, since these measurements merely focused on an employer-employee relationship and not specifically on a franchise relationship. Since this research focuses on a very specific topic, e-commerce implementation in a franchise relationship, the items have to fit that context. The distributive justice items are in line with those that were used in last year’s thesis (Pars, 2018; Croonen & Brand, 2018). The items are focused on whether the costs and benefits of e-commerce are fairly distributed between the franchisor and the franchisee. Items are measured on a 5-point Likert scale, which ranges from 1 = strongly disagree to 5 = strongly agree.
19
Franchisee satisfaction regarding e-commerce. The items of the dependent variable, franchisee satisfaction regarding e-commerce, are based on Mellewigt, Ehrmann, and Decker (2011). The original measurements used in that study were focused on the satisfaction of the franchisee with the products of the franchisor. The items are changed to fit with the e-commerce context from this study and to measure the satisfaction of franchisees with e-commerce. The respondents are asked to indicate to what extent they agree with the statements in the survey. An example of such an item is: I am satisfied with the quality of the online store. The items concerning the satisfaction of the franchisee are measured on a 5-point Likert scale, which ranges from 1 = strongly dissatisfied and 5 = strongly satisfied.
Encroachment. Unlike the other variables it is not conventional to measure encroachment. The majority of the existing literature takes this concept for granted. This research contributes to the literature by developing useful items to measure to what extent franchisees perceive encroachment. The items are roughly based on Emerson (2010). Items that measure this independent variable will be based on whether the franchisee loses customers, receives compensation for the potential loss, and whether the franchisor has exclusive territory. Since the items differ from each other, different scales are used. Some items are measured on a 5-point Likert scale which ranges from 1 = totally disagree and 5 = totally agree. Other items will be binary yes/no questions.
Trustworthiness. This variable is added in the analysis as alternative dependent variable. In case the two moderating variable and the dependent variable satisfaction are too tautological, this variable can be used as an alternative. The items of this variable are originally based on Mayer & Davis (1999) but changed in order to fit the context of this research.
Table 2
Reliability analysis – Cronbach’s alpha
Construct Cronbach’s alpha # of items Distributive justice .841 3
Procedural justice .923 7
E-commerce satisfaction .844 6
Encroachment .787 2
20 Control variables
Multi-unit ownership. The first control variable that is used in this study is multi-unit ownership. It can be argued that a power difference exists between single-unit franchise owners and multi-unit franchise owners. Single-owner franchisees are considered as one of the many individuals that are part of the franchise system, while franchisees who own more stores play a more essential role in the franchise system. Those multi-unit franchisees potentially have more bargaining power to make better and more beneficial contracts with the franchisor. It can be argued that the costs and benefits are fairer distributed in proportion to the number of units that the franchisee owns. As a result, the e-commerce satisfaction can potentially be higher.
Franchise system. In this study we controlled for the different franchise systems that are present in the dataset. Since there are five different supermarkets in the sample group it is important to realize that these are not automatically identical to each other. There are reasons to believe that there are differences between them, since some supermarkets are full-franchise while others are more company-owned (see table 7, appendix B). These differences can for example have major impact on whether the franchisees have bargaining power or possibly are at a disadvantage compared to company-owned units.
Compensation. In this study we controlled for the potential compensation that franchisees receive from the franchisor as a consequence of encroachment. It can be argued that the more compensation the franchisor provides to the franchisees, the more satisfied the latter party will be and the less it cares about the encroachment.
21 Analysis
The statistical program SPSS will be used for the analysis of the data in this study. The first steps in the process of analyzing the collected data are focused on the reliability of the data. Before a regression analysis can be performed, it is important to test whether the items per variable correlate with each other. Two different tests will be conducted to assess the congruence of the items. First of all, the Pearson correlation coefficient will be calculated. This coefficient has a value between -1 and +1, where -1 is a total negative relationship, 0 is no correlation and +1 is a total positive relationship between the items. Second, the Cronbach’s alpha of every variable will be calculated. This alpha explains the expected correlation between items that measure the same construct and has to be higher than 0.7 to be sufficient. If the variable passes both tests it means that the items that measure this concept are linked with each other. This means that there is a certain degree of correlation and that the items are not randomly selected. To conclude, a confirmatory factor analysis will be conducted to test whether the items load on the same factor. In an ideal situation, all the items will load on the same factor. This factor requires an explained variance of more than 50% in order to pass this test. Please refer to table 8-12, appendix B for the results of the factor analysis.
After the factor analysis, the items that passed the test can be summed up to form one variable. This is required to subsequently perform a regression analysis. In our case this would be one sum variable for encroachment, one sum variable for distributive justice, one sum variable for procedural justice, and one sum variable for franchisee satisfaction.
22
Results
In the first part of this section the descriptive statistics will be discussed. Hereafter, the results of the linear regression will be given, and this section will end with a comparison between the different franchise systems.
Descriptive statistics
General. The distribution of the 104 respondents this year based on gender was not very equal: 92.6% were male and 7.4% female. The average age of these respondents is 46.51, with a SD of 10.64. The youngest respondent was 23 years old, while the oldest was 68 years old. Furthermore, the great majority of the respondents, 89.4%, are single-franchise owner, since they have one store. Six franchisees indicated that they have two stores, while one respondent even has nine franchised stores. The respondents are considerably long part of the same franchise system, since the average years of participation in the current chain is 10.66, with a SD of 7.89. The newest franchisee is participating for 2 years now, while the franchisee with the most experience is already 36 years part of the same supermarket. The average scores of the items mentioned above and the variables that are used in the analysis are presented in table 3. The respondents score relatively high on variables such as trustworthiness (M = 3.50, SD = 0.64), e-commerce satisfaction (M = 3.44, SD = 0.64), and procedural justice (M = 3.18, SD = 0.86). The respondents score moderate on a variable such as distributive justice (M = 2.84, SD = 1.01), while they score low on the variable encroachment (M = 2.47, SD = 1.15).
Encroachment. Since encroachment plays an important role in this research, it is useful to study the results of this variable in depth. Encroachment was measured with ten different items and with different scales. It is important to first assess whether the franchisor, the franchisee or both parties sold products via the internet. 51 respondents indicated that their franchisor sells products via the internet (60%), while 34 indicated that their franchisor does not sell products online (40%).
As argued in the literature review, it is important to understand who is responsible for the delivery of the products that are sold by the franchisor. Only eight respondents indicated that these products are delivered directly by the franchisor, while 39 indicate that they are the ones that deliver the products that the franchisor sells online. The franchisees that are responsible for the delivery most likely have better agreements about distribution of costs and benefits of e-commerce, which makes them more satisfied with their franchisor and, above all, they do not consider encroachment as a major problem.
23
score fairly low (M = 2.31, SD = 0.92), while the franchisees that see those products being delivered by the franchisor score higher (M = 4.56, SD = 0.495). Interestingly, six of these eight respondents that see the products sold and delivered by the franchisor are Albert Heijn respondents. A more detailed explanation of the differences between the franchise systems will be given in the comparison section.
Compensation. The respondents in general indicated that they are not satisfied with the current compensation situation (M = 2.12, SD = 1.05). More than 60% of the respondents indicated that they were not satisfied with the current agreements about compensation or that there weren’t any agreements at all. Only nine franchisees (8.1%) indicated that they were satisfied with the agreements concerning encroachment compensation.
Franchise contract. The results show that more than 25% of the respondents work with contracts that originate from before 2010. This is remarkable, since the development of the internet went fast in the last few years. There are even three franchisees that have contracts from before 2000.
Overall grade. In total, 62 respondents (59.6%) gave their franchisor a grade on a scale from one to ten. Around 45% evaluated their franchisor with an eight or higher. In contrast, more than 15% graded their franchisor with an insufficient grade which was lower than a six. This last result is important, since this is a considerable percentage and proves that franchisors have to try harder to succeed in their mission to keep every franchisee satisfied.
To conclude, we can state that the respondents in general consider the franchisor as relatively trustworthy, that they are rather satisfied with e-commerce, that they evaluate the used procedures as fair, and that they do not consider encroachment as a major problem. However, in contrast to these positive results, the franchisees are not enthusiastic about the agreements that are made to compensate the franchisees in case encroachment does happen. Furthermore, it is noticeable that franchisees who are responsible for the delivery of online sold products perceive encroachment to a lesser extent than franchisees who lack that delivery responsibility. Moreover, more than 15% evaluates their franchisor with an insufficient grade, which indicates that there is plenty room for improvement.
Correlations
24
26 Regression analysis
In order to be able to study the direct relationship between encroachment and e-commerce satisfaction and the moderating role of both distributive justice and procedural justice on this relationship, a linear regression analysis was conducted. Table 5 presents an overview of the results of this analysis. In the base model, model 1, the analysis starts with the control variables and their influence on the dependent variable e-commerce satisfaction. Later on, in model 2, the independent variable and the moderating variables are added to the analysis. In the last model, model 3, the moderating role of distributive and procedural justice will be examined by adding the interaction effects of encroachment and both the justice types.
Model 1. This model predicts the dependent variable, franchisee satisfaction with e-commerce, solely with control variables. Initially, trustworthiness constituted an alternative dependent variable, but the regression analysis proved that e-commerce satisfaction had a better fit. This research controlled for the type of franchise system, whether the franchisee owns multi-units instead of one single franchised store, and for encroachment compensation. The control variable years of participation was left out of the analysis, since the results showed that this control variable was highly insignificant and weakened the R2. Model 1 is significant (p < .01) and has a R2 of 39.8%. This means that the model that only uses
control variables explains almost 40% of the variance in e-commerce satisfaction. The only significant control variable is Albert Heijn. The franchisees of this system have a highly significant, negative relationship with e-commerce satisfaction.
Model 2. This model entails the same control variables as model 1, but the independent variable and the two moderating variables are now added to the analysis. The overall model 2 is still significant (p < 0.01), while the Albert Heijn is not significant anymore. The independent variable encroachment has a small negative b but is most importantly not significant. As a consequence, we can conclude that there is no significant direct relationship between encroachment and e-commerce satisfaction. This means that hypothesis 1 cannot be confirmed. Furthermore, since there is no significant direct effect of encroachment on e-commerce satisfaction there is no moderating effect possible of distributive and procedural justice. These two moderating variables are not able to attenuate the relationship, which means that hypothesis 2 and hypothesis 3 cannot be confirmed either. Nevertheless, model 3 will be included in the next section to illustrate that this moderating relationship is truly absent.
Only one of the moderating variables, procedural justice, is positive and has a significant β while distributive justice is insignificant and has a slightly negative b value. Model 2 has a R2 of 53.9%, which
means that it can explain more than half of the variance in e-commerce satisfaction.
Model 3. Normally this model is the most important model in a moderator analysis, but it is less relevant now. As expected, there is absolutely no moderating effect of distributive and procedural justice, since the interaction effects are insignificant. Furthermore, there is a minor decrease in the R2,
27 Table 5
Moderator analysis
Note:
1) Dependent variable: E-commerce satisfaction 2) *p < 0.05; **p < 0.01
3) The Spar is the reference group in this analysis
Model 1 Model 2 Model 3
28 Comparison
The presence of five different franchise systems in the used dataset provides us with the opportunity to assess what the differences between the systems are with regard to their relationship with the franchisor. This can provide us with some interesting results that I will later try to explain by means of the characteristics of the franchise systems.
The most important scores will be highlighted in this section. Please refer to table 6 on the next page for an overview of all the scores. The main trend in the responses of the franchisees is that the franchisees of the Spar score high on every variable, except for encroachment (M = 2.06). The franchisees of this franchise system are apparently satisfied with the result of the implementation of e-commerce and do not see encroachment as a threat.
The franchisees of the Plus, Coop, and Jumbo respond often very similar to each other. They all score high on procedural justice, e-commerce satisfaction, and trustworthiness. Their average score on distributive justice is somewhat lower, especially for Plus franchisees (M = 2.43). Furthermore, they score relatively low on encroachment (M = 2.45; M = 2.14; M = 2.38). This in contrary to Albert Heijn, since the franchisees originating from this supermarket always score the opposite. They score very low on distributive justice (M = 1.71), procedural justice (M = 1.54), e-commerce satisfaction (M = 2.35), and trustworthiness (M = 2.63). Apparently, these franchisees are very dissatisfied with their relationship with the franchisor and the way e-commerce was implemented by the franchisor. In line with these results they score very high on encroachment (M = 4.56), which means that they feel strongly threatened by the introduction of online sales by the franchisor.
Regarding the two control variables in this table, years of participation and multi-unit ownership, there are two main conclusions. First, the franchisees of the Albert Heijn are by far the longest participating franchisees (M = 20.56), whereas the franchisees of the Jumbo are relatively new (M = 6.24). Second, Plus and Spar have the least amount of multi-unit owners (M = 0.00; M = 0.08), while the Jumbo has the highest amount (M = 0.19).
In order to assure that the scores of the franchisees of the Albert Heijn are genuinely different than the other franchise systems, an independent samples t-test was conducted for the variable encroachment. This independent samples t-test turned out to be significant, t(71) = 7.130, p < .001. There turned out to be a significant difference in the scores for franchisees of the Albert Heijn (M = 4.56, SD = .62, N = 8) and the other franchisees (M = 2.21, SD = .91, N = 65). These results suggest that franchisees from the Albert Heijn significantly perceive more encroachment than franchisees of the other four franchise systems.
30
Discussion
In this section the main results will be discussed and interpreted. Hereafter, the theoretical and practical implications will be highlighted, the limitations will be indicated, and recommendations for future research will be given.
Main analysis
This research was set up to study in what way the introduction of online sales by the franchisor influences the franchisee-franchisor relationship. The goal was to clarify the role of encroachment regarding the e-commerce satisfaction of franchisees and to find out in what way procedural and distributive justice were able to moderate that relationship.
Up until now, literature about encroachment is very scarce and diverse. There is no consensus about the different types of encroachment and the concept itself is, to the best of my knowledge, never measured in a proper way. This paper aims to contribute to the literature by providing a better understanding of the role that encroachment plays, developing types of encroachment, and subsequently measure the concept.
The first and foremost question in this research concerned the influence of encroachment on franchisee satisfaction. As hypothesis 1 proposed, it was expected that encroachment had a negative direct effect on satisfaction. However, the results of the regression analysis showed that this relationship was not significant. Therefore, hypothesis 1 could not be confirmed and we cannot conclude that encroachment indeed has a negative influence on franchisee satisfaction with e-commerce. This result is not in line with the literature on encroachment, since most of the scholars argue that (e-)encroachment is one of the big problems for franchisees (Emerson, 2010; Trice, 2001).
Second, it was hypothesized that distributive justice and procedural justice would moderate the relationship between encroachment and franchisee satisfaction with e-commerce. It was expected that these two variables would attenuate that relationship. However, since there was no direct relationship found between the independent and the dependent variable, a possible moderating role of these two justice types is impossible. Model 3 of the regression analysis confirmed this result, since the two interaction effects were not significant as well. Therefore, hypothesis 2 and 3 cannot be confirmed.
31 Other findings
The results of the regression analysis show some interesting findings for the additional analysis. First, procedural justice was highly significant. There is a positive, direct relationship between procedural justice and e-commerce satisfaction. This result confirms existing literature, since this relationship was already found in earlier research, although in a general context (Grace et al., 2013; McFarlin & Sweeney, 1992). Since procedural justice is such an important determinant of e-commerce satisfaction, it is interesting to understand why. The results show that the franchisees value that the franchisor uses procedures that are in line with the franchise council. Further research seems required to understand the underlying motives of the importance of procedural justice.
The other notable result from the regression analysis is that the control variable ‘Albert Heijn’ was significant in the first and third model. This means that this particular franchise system has a significant, negative relationship with franchisee satisfaction. In other words, the franchisees of this franchise system are unsatisfied with the procedure and end result of the implementation of e-commerce by the franchisor. The same pattern is observed when the means are compared of the different franchise systems. Albert Heijn franchisees score lower on e-commerce satisfaction, procedural justice, distributive justice, and trustworthiness. They score high on encroachment, which means that the franchisees from this franchise system have serious concerns about encroachment through the introduction of online sales by the franchisor. An independent samples t-test confirms that the average scores of these franchisees significantly differ from the average scores of the other franchise systems.
There are several possible explanations for these results. Albert Heijn is, compared to the other systems, the biggest supermarket company and percentage-wise the company with the least franchised units vs. company-owned units (see table 7, appendix B). As a consequence, they have less to gain from these franchised units than companies who are fully franchised, like the Spar and the Plus. Furthermore, Albert Heijn can be considered the founder of online shopping in the supermarket industry in the Netherlands. The market of online supermarkets has a yearly turnover of about 1.2 billion and Albert Heijn is market leader with a share of 42 percent. The second largest supermarket is Jumbo, with a market share of 21 percent. The online sales of Albert Heijn are thus considerably higher than the competition, which indicates the importance of online sales for Albert Heijn. Since the company is the founder of online supermarket shopping, Albert Heijn has a lot of experience in doing online business and has a main focus on delivering the products at home. As a consequence, the franchisees are circumvented, and the customers are less likely to turn up in the store. The other supermarkets started later with online selling and they had an initial focus on store pickup. The main advantage of store pickup is that the individual franchisees of these supermarkets still see the customers in their stores. These developments explain to some extent why Albert Heijn franchisees are less satisfied and feel more encroached by the franchisor.
32
furious about the distribution of the revenue of the online store. It is not inconceivable that a conflict of this scale still affects the franchisees in a negative manner.
Implications
Theoretical. It can be argued that this research has some theoretical implications. In the literature review, an attempt was made to develop different types of encroachment. Many researchers consider territorial encroachment the only form of encroachment, while there are many more different forms worth mentioning. This research identified distribution encroachment as a relatively new form of encroachment, which is especially relevant in these modern times. In the context of this research this form of encroachment was the one perceived by the franchisees. It can be argued that this form of encroachment will be the one to watch in the coming years, as online shopping will take an ever more prominent place.
Furthermore, this research is, to the best of our knowledge, the first that tries to make encroachment measurable. This concept is taken for granted by other researchers for years and not worthwhile to measure, but especially with the advent of online sales it is one of the most important topics in the modern franchise world. Researchers need to further develop these measures in the future, to improve the reliability.
Practical. The majority of the franchisees is pleased with their franchisor and how e-commerce was implemented. However, 15% of the franchisees indicated that they weren’t satisfied. This is a substantial number that cannot be set aside. Since this is an overall grade, we cannot conclude that this insufficient grade is completely due to the implementation of e-commerce. Other relatively common causes of franchise conflict concern the prices franchisees have to pay the franchisor for their supplies or unfair distribution of the overall costs. However, despite the unclear cause it is still a substantial percentage of dissatisfied franchisees that cannot be neglected.
Furthermore, there is room for improvement with respect to encroachment compensation. The majority of the franchisees is not satisfied with the agreements about financial compensation. This can cause conflicts when encroachment becomes a bigger issue in the future. It seems like several franchisees have outdated contracts, since some of them indicate that their contracts originate from the last century. The task for the franchisor is to be proactive and come forward with new agreements, which includes encroachment compensation, in order to keep the franchisees satisfied.
33 Limitations
The most important assumption made in this research concerning encroachment is that this concept has negative effects for the franchisee. Since this research is unable to find a significant relationship between encroachment and satisfaction, it is perhaps necessary to reconsider the current view. Some researchers like Kalnins (2004) argue that there may be potential positive effects for the franchisee as well. Additional stores in a market can lead to more brand awareness and possible economies of scales in promotion and advertising. It can be argued that an online store will have the same effects and indeed increase the brand awareness. Franchisees can subsequently take advantage of this opportunity. One of the limitations of this research therefore is that it only focuses on the potential negative effects for franchisees and that it neglects the potential opportunities of encroachment. Other researchers have a role to play here, since further research is needed to examine whether there are truly positive encroachment effects.
This research has tried to develop measurements for encroachment, since these did not exist until this moment. As indicated in the theoretical framework, encroachment is often taken for granted and not a topic that is easily measurable. This research tried to contribute to the literature by developing useful items to measure to what extent franchisees perceive encroachment. However, it can be argued that the decision to innovate and measure encroachment is brave, but not without any risk. This decision can be considered as one of the limitations of this research, since the scales have not been used for years in multiple other studies. The results have to be interpreted with care until the scales are well established. In the next section, recommendations will be given how to proceed and further develop the measurements.
Furthermore, encroachment is a broad concept consisting of different aspects such as competition, compensation, contractual arrangements, and actual perceived encroachment. In this research, I decided to measure encroachment with different scales, ranging from 5-point Likert scales to binary questions (Yes/No), to capture every different aspect. However, as will be indicated in the future research section, more understanding regarding encroachment is needed to thoroughly understand this concept. Only then, it is possible to accurately measure encroachment and contribute to the existing literature about this concept.
34 Future research
This research is one of the first to actually measure the concept encroachment. The items are roughly based on Emerson (2010) and can be considered as a first exploration. It can be very interesting for future research to focus on this topic, since this research can be seen as a first test for the items. In order to improve the reliability of the items it is necessary to improve both the content and face validity. The content validity can be improved by involving more franchise experts in this research. In-depth interviews can be used to further refine the different types of encroachment and can even possibly help to further develop the encroachment measurements. The face validity can be improved by using a target group of franchisees to fill in the questionnaire. This is important to make sure that the respondents understand the questions and are able to fill it in. The more these items will be used, the more they will be sharpened and made accurate.
Second, this research focuses on one single industry in one country, the Netherlands. The supermarket industry is targeted twice now, and it can be interesting to examine what the results are in another industry. The type of products sold online possibly influences the number of people that go to physical stores or decide to shop online.
In the third place, a general recommendation for the future will be to collect more data in order to be able to improve generalizability. It will help the researchers to more accurately conclude and generalize their findings. If possible, it is helpful to have a good distribution among the franchise systems, since the distribution is a little skewed at the moment.
Conclusion
35
References
Abell, M., & Bird, B. (2016). Legal Perspective of The Regulatory Framework and Challenges for Franchising in the EU. European Parliament's Committee on the Internal Market and Consumer Protection. 1-48.
Abell, M., & Scott, A. (2000). The e-commerce challenge for franchising. Managing Intellectual Property, (101), 34-37.
Adams, J.S. (1965). Inequity in social exchange, in Berkowitz (Ed.), Advances in Experimental Social Psychology, Vol. 2, Academic Press, New York, NY, 267‐299.
Anderson, J. C., & Narus, J. A. (1990). A Model of Distributor Firm and Manufacturer Firm Working Partnerships. Journal of Marketing, 54(1), 42–58.
Antonsson, G., & Fernlund, A. (2006). Franchising: e-Commerce and Data Protection Issues in Sweden. International Journal of Franchising Law, 4(1), 26.
Arya, A., Mittendorf, B., & Sappington, D. E. M. (2007). The Bright Side of Supplier Encroachment. Marketing Science, 26(5), 651–659.
Bordonaba-Juste, V., & Polo-Redondo, Y. (2008). The Effect of Relationship Marketing Strategy on Franchise Channels. Journal of Marketing Channels, 15(1), 71–91.
Castrogiovanni, G. J., Combs, J. G., & Justis, R. T. (2006). Resource Scarcity and Agency Theory Predictions Concerning the Continued Use of Franchising in Multi-outlet Networks. Journal of Small Business Management, 44(1), 27–44.
Combs, J. G., Michael, S. C., & Castrogiovanni, G. J. (2004). Franchising: A Review and Avenues to Greater Theoretical Diversity. Journal of Management, 30(6), 907–931.
Chiou, J., & Droge, C. (2015). The Effects of Standardization and Trust on Franchisee’s Performance and Satisfaction: A Study on Franchise Systems in the Growth Stage. Journal of Small Business Management, 53(1), 129–144.
Chiou, J., Hsieh, C., & Yang, C. (2004). The Effect of Franchisors’ Communication, Service Assistance, and Competitive Advantage on Franchisees’ Intentions to Remain in the Franchise System. Journal of Small Business Management, 42(1), 19–36.
36
Cohen-Charash, Y., & Spector, P. E. (2001). The Role of Justice in Organizations: A Meta-Analysis. Organizational Behavior & Human Decision Processes, 86(2), 278–321.
Colquitt, J. A. (2001). On the Dimensionality of Organizational Justice: A Construct Validation of a Measure. Journal of Applied Psychology, 86(3), 386–400.
Croonen, E. (2010). Trust and Fairness During Strategic Change Processes in Franchise Systems. Journal of Business Ethics, 95(2), 191-209.
Dant, R. P., & Nasr, N. I. (1998). Control techniques and upward flow of information in franchising in distant markets. Journal of Business Venturing, 13(1), 3-28.
Davies, M. A. P., Lassar, W., Manolis, C., Prince, M., & Winsor, R. D. (2011). A model of trust and compliance in franchise relationships. Journal of Business Venturing, 26(3), 321–340.
De Mergelina, R. B., Karp, E. H., & Pearce, T. P. (2015). Encroachment Issues around the World. International Journal of Franchising Law, 13(1), 3–26.
District court Amsterdam. (2018). Retrieved April 29, 2019, from: https://uitspraken.rechtspraak.nl/inziendocument?id=ECLI:NL:RBAMS:2018:5098&showbutton=true &keyword=hema
Elango, B., & Fried, V. H. (1997). Franchising Research: A Literature Review and Synthesis. Journal of Small Business Management, 35(3), 68–81.
Emerson, R. W. (2010). Franchise Encroachment. American Business Law Journal, 47(2), 191–290. Folger, R., Skarlicki, D. P. (1999). Unfairness and resistance to change: hardship as mistreatment. Journal of Organizational Change Management, 12(1), 35-50.
Franson, B., & DeSmith, D. (2005). Does the Internet Solve all of Your Franchisees’ Problems? Franchising World, 37(8), 14–16.
Grace, D., Weaven, S., Frazer, L., & Giddings, J. (2013). Examining the Role of Franchisee Normative Expectations in Relationship Evaluation. Journal of Retailing, 89(2), 219–230.
