The Franchise Contract in Hotel Chains: A Study of Hotel Chain Growth and Market Concentrations

Abstract

Hotel chains can expand by using a variety of different growth strategies. Some studies argue that hotel chains use a wide array of strategies, with none prevailing over the rest. Several arguments can now be put forward to demonstrate that systems not based on capital transactions, particularly franchise agreements, are the strategies that hotel chains prefer when carrying out expansion programmes. The conclusions show that the franchise system has become the growth strategy most widely used by hotel chains and that the sharp rise in the use of this system has led to increasing market concentrations by hotel chains.