THE ROLE OF RELATIONSHIP AND FORMALIZATION IN DECIDING THE INTERNATIONAL FRANCHISING MODE

Abstract

This study aims to find out which international franchising mode has been selected depending on the different formalization levels of franchising contracts as well as the level of relationship between the main company and the dealer. The study has been conducted on the international franchising experiences of two Turkish fast fashion retail companies. The research question has been tried to be solved by focusing on the international franchising strategies of these two companies in the Iran, Russia, Saudi Arabia, Dubai and Qatar between 2005 and 2015. Document examinations and 7 interviews revealed differences and similarities between the international franchising strategies of two companies. Multiple case analysis has shown that level of formalization and relationship are effective in deciding the international frachising mode. The research findings have indicated that both relationship and formalization could be low in the single unit franchising mode, however the area development franchising mode has required higher relationship level. Besides that analyses found out that when master franchising mode has been chosen, the partners would have higher level formalization and relationship levels.