Return on Investments in Hotel Franchising: Understanding Moderating Effects of Franchisee Dependence

Benjamin Lawrence, Jie J. Zhang, Liwu Hsu and Sarah Zheng

Production and Operations Management, 2021, vol. 30, issue 8, 2420-2440

Abstract: Hotel franchising presents a unique network context for investigating inter‐organizational collaboration. Franchisees and franchisors must collaborate closely but face incompatible incentives in allocating financial and human resources to invest in three types of operations: centralized, network‐level operations run by the franchisor; distributed, outlet‐level operations managed by franchisees; and coordinated operations, which use franchisee and franchisor inputs. This study employs a mixed‐methods design to empirically examine the effects of these three types of investments on outlet‐level performance while considering franchisees' dependence on the franchisor for sales. To ground our understanding of the phenomenon, we interview US hotel industry experts, then test the conceptual model with a panel data set of 3500 franchised US hotel properties. We find that franchisee dependence moderates the impact of all three types of investments. Specifically, a high‐dependence franchisee's centralized investments and coordinated investments, and a low‐dependence franchisee's distributed investments are associated with higher levels of outlet performance. We discuss how structural embeddedness drives these effects and explore its implications for service supply chain design and collaborative operations management.

Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
https://doi.org/10.1111/poms.13383

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bla:popmgt:v:30:y:2021:i:8:p:2420-2440

Ordering information: This journal article can be ordered from
http://onlinelibrary ... 1111/(ISSN)1937-5956

Access Statistics for this article

Production and Operations Management is currently edited by Kalyan Singhal

More articles in Production and Operations Management from Production and Operations Management Society
Bibliographic data for series maintained by Wiley Content Delivery ().