Master Franchising gives you the edge and launches you as the territory leader. In this franchisor-franchisee relationship you are given exclusive rights in a specific area. In other words, you are a mini franchisor who recruits, trains, and provides ongoing support to each franchisee who signs.
Though this is essentially used for International expansion, it is also used locally. For instance Real Estate and Maintenance companies follow it for developing territories.
Master franchising is not for beginners as it involves huge capital for the license and development expenses. However it also involves plenty of advantages.
The Master franchisee receives a large sum of the initial franchise fee and typically 50% of the royalty. They can even own and operate their own units within the territory. The master franchisee is also benefiting from the existing successful operating model of business and the brand name. Being a master franchisee is more rewarding than being a multi-unit franchisees, area developers, and area representatives.
In addition, they have ongoing support from the franchisor partner to help them increase their profits. This includes support in management, leadership, and other high-level skills to help run the organization.
A qualified master franchisee usually has an existing business. Which means they have experience in sales and marketing. They also have important local business connections. In addition, they help overcome language and cultural barriers. In other words, they reduce the expenses to set up infrastructure overseas to recruit, train and support franchisees.
A well motivated master franchisor will also ensure smooth entry in the local market. Rapid growth and brand dominance is possible. The growth and number of franchisees directly affect the profitability of the master franchisee. Therefore, they ensure they recruit the best available resources and talent.
To sum it up, like any relationship, if the agreement between all the three parties are followed for mutual benefit, the arrangement will help them make more money with less stress. It is a win-win-win situation.
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