Master franchising is a method the franchisor uses to expand its business model in new markets, either regionally or internationally. The ultimate benefit to the franchisor is that it can expand the brand more quickly and with less developmental efforts. A master can identify regional challenges or barriers of entry quicker than the franchisor who may be located thousands of miles away.
Quite simply, a franchisor will find individuals with the knowledge, experience, and capability to conduct the same activities as the franchisor in a territory that the franchisor is not familiar with.
How Master Franchising Works
Not every franchise opportunity offers master franchising. Master franchises are commonly found in service-based models such as janitorial services or fast-food concepts where there will be a high-density of outlets or locations.
A master franchisee will be significant initial franchise fee up front to purchase the rights to the master franchise and develop the territory. That means, the master will be required to promote and sell franchises within this territory and provide all the initial and ongoing training to the franchisees.
The master will also be the key person to oversee the franchise operations and to address and resolve any issues arising from the franchisees. The master franchise contract will outline the number of outlets the master must open within a specific time period.
The Benefits of Master Franchising
Master franchisees earn a portion, it not all, of the franchise fees generated from franchise sales, as well as a percentage of the royalties within the territory. Masters may also be required to operate their own outlet – or a number of outlets – while they develop and grow the master territory.
Succeeding as a Master Franchisee
A franchisor will be very selective of who will qualify as a master franchisee. The most important criteria will be a strong net worth and established sales, marketing, and management experience.
To succeed as a master franchisee, you will not only need to pursue sales and marketing strategies to attract prospects to the brand, but also to manage the daily and monthly operational activities of your own franchise and those in your territory. Therefore, a master franchise will likely require two or more people to operate effectively – one person to look after sales and marketing, the other to run the business’ day-to-day needs.
Find a Master Franchise Opportunity
If you are looking for a master franchise, there will be fewer opportunities available than just buying a unit franchise. Start your search at a popular franchise directory that features a "master franchise" category.
