First, a little distinction. I suppose that a shop may be able to offer instruction through an agency without the shop itself being agency affiliated. (The shop has no affiliation per se, but it's instruction staff does.)
"1. How does a shop choose which agency to affliate with?"
Depends upon what makes the most sense to the shop. Many factors include what sort of agencies any affiliated instructors (employees and contractors) can teach. What sort of marketing support the shop receives comes into play. How the shop owner perceives the standing and quality of instruction offered through each agency is also important. Many other factors too. Could be as simple as having a personal rapport with the area manager for the agency.
"2. Are there any pre-requisites from the different agencies that the shop must meet before being granted their affiliation? If so, what?"
I can only speak to PADI's standards, and the answer is yes. For a shop to be a "PADI Dive Center" certain requirements must be met. Requirements include simple things like have scuba equipment available for retail sale, offering instruction, and promoting local diving and dive trips. A few requirements are safety related, like requirement to take first aid kit on all shop sponsored dives, and meeting regular air quality testing requirements for their compressor operations.
"3. Are there any particular advantages for the shop to affiliate with agency "A" over agency "B"? "
A definite maybe. High volume shops may have incentives, particularly for entering into exclusive arrangements. PADI offers discounts for materials to shops meeting certain requirements - some of which are requirements relating to number of certifications issued. But there are drawbacks to this to if you are not able to offer the customer the course he wants if a particular training agency is requested.
4. "Are the affliations exclusive or can a shop have multiples? Which agencies demand exclusivity? Why?"
I don't know if some agencies demand an exclusive arrangement, but some definitely encourage it. But, yes, a shop can have multiple affiliations.
"Which comes first, the agency or the shop?
Is this a chicken or egg question? Historically, I suppose (but don't know for certain) that there was probably a shop somewhere before agencies were even organized. But I think you are really asking for a bit different information. I'm not aware of any agencies which actually own retail dive shops. PADI requires a shop to already be in existance a short time before it can be formally affiliated with PADI (I think 6 months, but could look it up). The shop can offer PADI lessons from day one, but cannot call itself a "PADI Dive Center" right away.
