International Franchising Relationships

Franchising is an increasingly popular foreign-market entry and expansion strategy for retailers domiciled in slow-growth Western markets. Within the traditional model of franchising, the role of the franchisee is to implement the franchisor’s brand values and operational standards. Yet, there is reason to expect that the rigid approach to franchisee management, based on a comprehensive franchise agreement document and monitoring routines, is not ideally suited for penetrating culturally distinct markets. Our qualitative study investigates the case of a large U.K. franchisor that has enjoyed considerable success through a marketing strategy of developing and managing international franchising relationships in emerging markets. Specifically, it sustains a set of area development franchising relationships on the basis of open relationships characterized by mutual trust and ongoing communication. Our findings show how the openness and willingness of the franchisor to listen to the franchisee allows the identification and discussion of problems facing the partnership and opportunities for adaptation, growth, and mutual profits.