Franchise Spotlight: Master
A lucrative way to rapidly expand a business over a large geographic area using a tried-and-tested concept.
Master franchisees are tasked with finding, training, and supporting franchisees for a particular region.
They must ensure that brand standards are enforced uniformly across their territory, and help with things like securing finance, site selection, fit out and launch, and operational support.
A brand might expand beyond its country of origin for reasons that underpinned the decision to franchise the business in the first place. This includes delegating capital risk and control to someone in closer proximity to franchisees who has intimate knowledge of the local sector and region’s legal, economic, cultural, and linguistic environment.
Even Canadian brands sometimes enlist master franchisees to power their expansion into the US, and vice versa, despite the countries’ proximity and similarities.
Benefits of buying a master franchise
Buying a master franchise gives you the right to expand a franchise in a particular geographical area, which could be a particular province or an entire country.
It’s generally a much bigger investment than buying a regular franchise, but also potentially more lucrative, with earnings generated from franchise fees and recurring royalties paid by sub-franchisees.
In short, it’s a proven way to expand a business rapidly over a large geographic area using a tried-and-tested concept.
However, the criteria to become a master franchisee will be demanding, with leadership skills, an impressive resume and evidence that you’ve done extensive market research.
You should be just as thorough in your own due diligence. This should include analysis of the brand’s growth and profits to date, strengths and weaknesses, the industry growth rate, and industry trends that might present opportunities or threats to the business model.
You should also scrutinize the franchise disclosure agreement with the help of a lawyer. This agreement generally lasts between 10-20 years and sets out your rights and obligations.