The Franchisor—Franchisee Relationship

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Abstract
A study of 331 general managers with two major U.S. hotel chains found that a strong relationship between a franchisee and a franchisor meant better hotel performance compared to competing hotels and to other hotels in the chain. The properties with a strong relationship to headquarters had higher quality-assurance and guest-satisfaction ratings than did other hotels in the chain. Compared to competitors, hotels with a strong partnership with their franchisor enjoyed higher occupancy, room rates, and gross profit. The benefits to the franchisee are self-evident, and the franchisor also benefits from having a string of high-performing hotels.

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