International master franchise agreements: An investigation of control from operational, relational and evolutionary perspectives

This paper seeks to examine the inter‐organisational processes used to control international master franchise agreements from operational, relational and evolutionary perspectives.

The research is undertaken through a qualitative, in‐depth case study in the international hotel industry. The case comprises an international master franchise agreement between a large US‐based hotel franchisor and its European master franchisee.

The study identifies the inter‐related nature of operational and relational control processes and how these evolve over the life of a master franchise agreement. It reveals how the perceptions of franchise members serve to enhance or inhibit the development of relational norms and how these, in turn, impact on the predominant type of control and the specific inter‐organisational processes employed.

The research is based on a single in‐depth case study within one industrial context and the universality of the findings may therefore be limited.

The paper offers insights to managers of international master franchise agreements on the interaction between members' perceptions, relational norms developed and the inter‐organisational processes used to control the agreement. It also reveals how the use of contractual controls can inhibit the development of relational norms and negatively impact on relationships between franchisors and master franchisees. The findings presented may have relevance to managers of other types of international alliance agreements.

By drawing on both the alliance and franchise literature and employing a qualitative approach, the study helps to close a gap in the current international franchise literature through the identification of specific inter‐organisational processes for control within international master franchise agreements, how these evolve in respect of relational norms and how these are underpinned by perceptions of franchisor and franchisee members.