Key Human Resources Practices Benefit Franchisees, Performance

In the new Center for Hospitality Research and Cornell Center for Innovative Hospitality Labor and Employment Relations brief, “Understanding Human Resource Practices and Outcomes in Franchise Businesses,” Professor Tashlin Lakhani finds that increased collaboration between hotel franchisees and franchisors on human resources best practices can lead to higher organizational performance.

The study uses a unique survey of human resources practices and outcomes in a US-based limited-service hotel chain, according to Lakhani. “This study illustrates a compelling argument for franchisors to provide franchisees with more guidance on how to structure their human resource systems to achieve optimal performance,” she says.

The analysis suggests that inexperience and strong profit motives of franchisees lead them to underinvest in human resource practices compared to company-owned operations. “Recognizing the constraints imposed by joint-employer status, franchisors may be able to provide optional human resources tools and best practices for franchisees that draw from their knowledge and experience in the operations they directly own and manage,” writes Lakhani. 

“By working together and providing franchisees with guidance on human resources practices, franchisees can be—as the famous saying goes—‘in business for themselves, but not by themselves.’ Companies that do so are likely to find that this guidance pays off by creating a more stable workforce that is motivated to provide superior customer service and maintain brand standards.”

Tashlin Lakhani is an assistant professor of management and organizations at the Cornell Nolan School of Hotel Administration in the SC Johnson College of Business. She received her PhD from the ILR School at Cornell University. Prior to joining the Cornell Nolan School in 2020, she was on the faculty at the Fisher College of Business at The Ohio State University. 

Her research investigates the determinants and outcomes of human resource practices, with a particular emphasis on how firm ownership structures influence human resource investments and organizational performance. Her current work focuses on franchise businesses in the hotel and restaurant industries. She teaches courses on human resource management and franchising.