International franchise partner selection and chain performance through the lens of organisational learning

This study aims to investigate how international franchisors engage in exploratory and exploitative learning in the partner selection process and the implications for chain performance. Based on an embedded case study of a leading international hotel organisation, the findings reveal that the franchisor attempted a balanced learning approach in response to challenges caused by high cultural distance in international markets. However, the 'crowd-out' effect of exploration and exploitation created a 'tension': exploration emphasising adaptation to local needs dominated the partner identification stage in country markets, whilst exploitation stressing standardisation and efficiencies dominated the partner decision-making stage at division. As a result, a consistent brand image came at the cost of very cautious international expansion.