Question: 5 . Studies show that large hotel chains such as Marriott tend to reduce the number of hotels they franchise to outsiders and increase the
Studies show that large hotel chains such as Marriott tend to reduce the number of hotels they franchise to outsiders and increase the number of hotels it owns and operates directly. When chains require franchisees to upgrade the hotels they own, the franchisees often resist incurring this expense that Marriott considers important because weve build our name on quality.aWhat sort of agency problem is involved in this situation?bWhy would Marriott worry about the quality of hotels it does not own?cWhy might Marriott tend to own its hotels in resort areas such as national parks, where there is little repeat business, and franchise in areas where there is a lot of repeat business?
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