Governance modes in international franchise networks: partner selection and relationships

Abstract

Purpose of the study: This paper has the purpose of investigating the influences of partner selection and development of relationships on the choice of the governance mode in international franchising.

Methodology/Approach: By applying a qualitative methodology with the multiple case study method and based on ten in-depth interviews with business managers and specialists, three case studies were prepared to compare the strategies of internalization adopted by franchise networks.

Results: The results led to the observation that partner selection and relationships influence the choice of the governance mode. Relationships are also an influencing factor for partner selection. Those conclusions led to the proposition of an integrative model of the connections established between partner selection, relationships and the governance mode.

Theoretical/methodological contributions: Despite being mentioned as entry modes in international markets, there are still few studies which investigate governance modes in international franchising. This paper contributes to the academy by exploring topics of high priority for the franchising sector and by following suggestions proposed by previous studies.

Relevance/originality: The proposed model suggests the franchise networks consider local relationships and partners in the development of more complex arrangements and combinations of governance modes in foreign markets, identifying opportunities that are aligned with their strategy.