In the late 1990’s, as Radisson Hotels was re-visioning and re-focusing the company, it was discovered that the Radisson brand, with its multitude of properties and franchised locations, did not conform to any uniform corporate-wide standard for quality of service. Radisson recognized that this uniformity is attractive to the customer, when applied equitably across the corporate and franchise structures, as it assures the customer of quality (Gomez, et al., 2011).
The corporate leadership of Radisson also came to realize that the hotel chain had been, for years, driven to serve the franchisee rather than focusing on serving its most important customer, the Radisson hotel guest.
As Radisson worked to redefine their brand to focus on guest satisfaction and customer service excellence, they first identified locations that warranted invitations to leave the Radisson family of hotels, and secondly studied locations where the Radisson brand was lacking but which held the potential for a profitable and beneficial Radisson presence (Schroeder 2007). It was during this time of re-visioning that Radisson announced the implementation of its 100% Guest
Satisfaction Guarantee program, which defined the experience that the Radisson customer should always expect to receive at all Radisson establishments.
Subsequent to this commitment to service quality, Radisson could, on the corporate side of the business, institute policy that governed company, management, and employee adherence to those quality service directives. However, at the franchise level, Radisson would need to implement contractual changes and corporate strategies to encourage franchise compliance as well as franchise commitment to Radisson service quality expectations.
With the proper franchise agreements in place, it is possible for Radisson corporate to contractually obligate the franchisee to comply with the company standards. The value in this is uniformity for the Radisson guest, which can ultimately build customer loyalty and trust across both the franchise and the corporate systems. However, contractual arrangements do not always guarantee franchise quality or performance. So how should Radisson drive commitment to service quality through their franchise organization?
Data collection from the franchise level, reported to Radisson corporate, is essential for tracking and forecasting performance of the franchised units. This information, when compiled and published across the corporate and franchised systems, can provide incentive and establish benchmarking criteria, thus driving franchise commitment to Radisson service quality. Radisson can stimulate franchise benchmark control by publishing efficiency benchmarks like sales, growth, performance variables, and other comparative data (Kidwell, et al., 2011). By publishing and sharing comparative information about other franchises, Radisson franchise managers can compare peer efforts, financial benefits, and unit performance: “In a competitive world, access to this benchmark information is an important disciplinary device in the franchise system” (Kidwell, et al., 2011). It is from this dissemination of performance data that social controls take root and drive franchise commitment to quality. It is also this same data that serve
to identify franchises that are under-performing, free riding on the brand, or shirking corporate responsibilities. Another method for driving franchise…