The internationalization of hospitality firms: factors influencing a franchise decision‐making process

Abstract

PurposeThe paper's purpose is to evaluate the factors which influence a multinational hospitality organization's franchise decision‐making process.Design/methodology/approachA single embedded case study of an international hotel firm was the focus of the enquiry. Interviews and document analysis were used as data collection techniques.FindingsFindings suggest that the two important contextual variables which have a bearing on the franchise decisions are the key stakeholders of the organization and different country markets. Decisions with regard to franchising are driven by capital market systems trying to meet the demands of shareholders and also by a strong desire to protect the core competences to meet the expectations of international customers. The growth through franchising mode however faces strong cultural challenges in different hotel markets in Europe.Research limitations/implicationsConducted on a single case study basis, with the hotel industry chosen as its focus the applicability of the research findings to other industries is therefore debatable. The findings are also limited to franchisors versus firms pursuing other growth strategies.Practical implicationsThis paper illuminates the socio‐cultural challenges international service organizations face, and highlights the types of practices required to enable growth through franchising in different country markets.Originality/valueThis paper investigates a franchise decision‐making process and examines different factors that interact and exert influence on each other while a service organization decides to choose the most appropriate franchise project. The paper identifies the key stages and the variables to the process that could be verified in the future.