In master franchising, a franchisor grants a franchise in respect of a whole territory or country. The master franchisee is then responsible for recruiting sub-franchisees, and training and supporting them.
The master franchisee essentially becomes a mini-franchisor for the specified territory or country.
In exchange, the master franchisee receives a large percentage of the initial franchise fee from each sub-franchisee, and a large percentage of ongoing fees.
The master franchisee usually agrees to a development schedule, which may include owning and operating their own units.
Master franchises are often used by franchised brands wanting to expand overseas. It saves the master franchisor the expense (and headache) of setting up an infrastructure abroad.
Partnering with a qualified overseas master franchisee also help with language and cultural differences, as well as local recruitment, suppliers, real estate, etc. It also significantly reduces risk.
If you are thinking of setting up a master franchise, or you have the opportunity to buy a franchise for a specific region, we can give you the benefit of our knowledge and experience, helping you to negotiate terms that suit you.