Hotel Franchise Agreements and the Psychological Contract

Abstract

This qualitative research study explores the hotel franchising relationships and the psychological contract and develops a model of success factors of hotel franchising relationships. There is a rich franchising literature, but little work that focuses on hotels. Three main issues on hotel franchising relationships are identified i.e. hotel franchising triggers; psychological contract and hotel franchising; hotel franchising lifecycle and phases. Various authors have highlighted the importance of managing franchising relationship and applying a systematic approach to evaluate it at regular intervals. Existing franchising lifecycle models and psychological contract models have also been criticized as in need of updating to design a comprehensive model of the success factors of the hotel franchise relationship. A multiple case study approach was adopted involving document analysis and semi-structured interviews with hotel franchisors and a number of their franchisees to explore how hotel franchisors and franchisees approach the issues of hotel franchise lifecycle, phases and psychological contract. This study explores the nature of the relationship between franchisor and their franchisees in each phase of the hotel franchise relationship. The findings illustrated the important aspects which the franchisor and the franchisees should follow in each phase in order to have success in their relationship. These findings led to the development an initial model of hotel franchise success factors. Additionally the findings stressed the necessity of developing polices and practices used by the psychological contract to be more helpful for the success of hotel franchise relationships. This research uses cross-case analyses to identify the gaps between cases; and the gaps between franchisors and their franchisees. The conceptual framework is used as a tool to structure the layout of the analysis. This led to the development of a success model for the hotel franchise relationship. The researcher developed the final model based on the way franchisors and franchisees approach hotel franchising relationship aspects. This model tries to make a relationship between tangible and intangible issues in each phase of the hotel franchising relationship in order to achieve the research aim. This strategy resulted in the identification of success factors affecting the hotel franchise relationship. The final model should be used by franchisors and franchisees to develop their own relationship management model which addresses their own needs since it can vary from one hotel to another.