Franchise partner selection: perspectives of franchisors and franchisees

This paper aims to identify the partner selection criteria employed both by franchisors and franchisees in master franchise agreements and evaluate how different selection criteria interact within the selection process and influence the decisions taken.

A single embedded case study of an international hotel firm was the focus of the enquiry. Interviews and document analysis were used as the data collection techniques.

The findings reveal that the establishment of franchise partnership involves a mutual and careful evaluation between franchisors and franchisees to assess whether their partnership criteria are compatible. The partner selection approach determines the extent of importance attached to different task‐ and partner‐related selection criteria. In addition, the study identifies the role that different selection criteria play at different stages of the process.

The findings are based on a single case study in the international hotel industry and therefore may not be generalisable to other firms or industry sectors. Moreover, the study comprised master franchise agreements, and this contextual variable may impact on the findings determined.

This paper illuminates the challenges both international franchisors and franchisees face in selecting their partners and proposes that both franchisors and franchisees should employ clearly defined selection criteria, utilise a defined selection process and choose their selection approach carefully in recruiting partners.

This paper cross‐fertilises the strategic alliance and franchise literature to evaluate the interplay of partner selection criteria, process, selection approach and international franchise recruitment. The findings contribute to the understanding of a largely neglected area, franchise partner selection and recruitment, by taking a holistic approach and incorporating the views of both franchisors and franchisees.