Factors influencing relationship development in franchise partnerships

Abstract

PurposeThis paper aims to identify and evaluate the factors which influence relationship development between franchisors and franchisees in international service franchise partnerships.Design/methodology/approachCase studies of two international hotel firms were the focus of the enquiry. Interviews and document analysis were used as the data collection techniques.FindingsFindings demonstrate that role performance, asset specificity and cultural sensitivity influence relationship development in franchise partnerships. The influence of these factors, however, varies in different forms of franchise partnerships, namely individual and master franchises.Research limitations/implicationsThe findings are based on case studies in the international hotel industry and therefore may not be generalizable to other industry sectors.Practical implicationsService firms should adopt a systematic organization‐wide approach to, and management of, relationship development in franchise partnerships. In particular, in the case of cross‐country partnerships, both franchisors and franchisees need to develop and exploit their inter‐cultural skills and adapt their business practices to the cultures of host and home countries where appropriate.Originality/valueThe paper exploits three main streams of research which could inform the antecedents of business‐to‐business relationships, namely power‐dependence, transaction cost theories and international business. It thus advances services marketing and more specifically international franchising literatures by offering a holistic theoretical perspective to our understanding of business‐to‐business relationship development.

Enhancing Business Relationship Quality Through Cultural Sensitization

“…Research has shown that the ability of a firm to break down cultural barriers and establish close business relationships with partners is a major factor for success in international business marketing (e.g., Terawatanavong & Quazi, 2006). Unless exporters are sensitive to the cultural aspects of buyer-seller relationships, it is very difficult to build long-term high-quality relationships (Altinay & Brookes, 2012).…”

Performance in Franchise Systems : The Franchisee Perspective

“…In a franchise system as an interfirm relationship, mutual trust between the franchisor and franchisee is important for them in performing their own tasks (Victoria Bordonaba-Juste and Polo-Redondo, 2008). Trust is an important factor in the franchising relationship Frazer, 2006, Watson andJohnson, 2010), and encourages both parties to maintain and develop the relationship (Victoria Bordonaba-Juste and PoloRedondo, 2008), work successfully (Eser, 2012) and achieve mutual profitability (Davies et al, 2011 , Altinay andBrookes, 2012).…”

The Use of Importance-Performance Analysis to Measure the Satisfaction of Travel Agency Franchisees

“…(Justis & Judd, 2002;Kaufmann & Stanworth, 1995;Lim & Frazer, 2004;Williamson, 1995;among others). Likewise, a franchisee receiving satisfactory support from the franchisor partner develops confidence in the franchisor's capabilities (Altinay & Brookes, 2012;Flint-Hartle & de Bruin, 2011;Hing, 1995). Therefore, the relationship between the franchisor and franchisee is of vital importance for the development and success of a franchise.…”

“…Researchers recognize the need to create a collaborative and cooperative atmosphere to handle tensions (Altinay & Brookes, 2012). Franchisors should identify areas or factors franchisees are dissatisfied with, and areas they are not to deal with these tensions.…”