This can offer a wonderful introduction into business management and if the processes are correct, can be a great success. And conversely, there is more to lose if it all goes wrong.
Master franchisees will not only receive the company's structure and access to its training and support system, they will receive the authority to appoint, train and receive a proportion of fees from 'regular' franchisees.
This responsibility for a large area can deliver huge returns. Utilising an existing model for marketing the brand and distributing the product, if there is enough interest from franchisees, company outlets can spread rapidly.
However, a master franchise requires significant investment so it is vital that everything is in place before starting.
In depth market research needs to be done across the whole country or region to determine whether there is consumer appeal in a variety of areas for the good or service you wish to sell.
It is vital that contracts with the franchisor are agreed in a straightforward, uncomplicated way so that the master franchisee knows exactly what’s covered and expected of them.
Issues in it include how much power is provided, when the renewal process begins, and the exact territory area controlled, particularly for regional master franchisees.
It is worth consulting a lawyer with some experience in licensing agreements to examine the contract.
Please be mindful that master franchisees will be essentially responsible for running two separate businesses, so the individual must be prepared to handle all the pressures of ensuring that franchised outlets are up-and-running successfully across a country or region.
This role is definitely a demanding one, but with the right management structure in place, the right support from the franchisor, you can make big returns on investment.
A certain amount of patience is required though and master franchisees must concentrate on the long-term, as there is a chance of some local franchisees failing to make an impact and have to close.
Some key benefits to a Master Franchise
- Territorial Control: Gain exclusive rights to operate and expand the franchise in a defined region.
- Higher Earnings: Potential for substantial profits as you earn a percentage of sub-franchise sales, fees, and profits.
- Business Management: An entry into business leadership with the support of an established brand.
- Proven Model: Leverage a successful business model that's already in place.
- Support: Access comprehensive support from the franchisor, including training, marketing, and legal guidance.
- Territorial Expansion: The opportunity for rapid and impactful market penetration.
- Large Investment Potential: Suitable for entrepreneurs with significant capital.
- Market Growth: Contribute to expanding the franchise network within a country or region.
- Legal Clarity: Ensure you fully understand the franchise contract and rights.
- Preparation and Support: With proper planning and a robust management structure, master franchises can yield substantial returns on investment.
Why not check out the Master Franchise opportunities available across MENA via Franchise Direct?