A Typology for Hospitality Franchise Systems

Abstract

In spite of the high level of independence that exists in a franchise system, franchisees and franchisers are extensively dependent on each other. Because of this greater interdependence that exists in the system, financial success of one depends on the financial performance of the other. Therefore, any strategic choices made by a franchisee must always include the financial performance of the franchiser. A strategic typology based on the financial performance of franchisees and franchisers is presented in this paper. Potential strategic choices to the franchisees in different given financial performance scenarios are discussed. It is a conceptual paper offering a model and suggestions for future research on strategic management in franchising.