The Franchise Owner's most trusted news source

Log In / Register | Jun 24, 2018

Master Franchise

Some brands use the term "master franchise". This is similar to an Area Developer, except a Master Franchise has the right to sell franchises (termed sub-franchisor by the industry) and may have strong operational support responsibilities. It's best to think of a Master Franchisor as a sub-franchisor in which they are organized, trained and remunerated to grow a franchise system.

Under a Master Franchise agreement, you pay a significant fee -- the master franchise fee. As the Master Franchise sells franchises to its franchisees, a franchise fee is paid to the Master Franchise and shared with the Franchisor. Franchisee royalties are also shared with the franchisor. Usually the franchisor holds the right for final approval of the sub-franchisee. And the sub-franchisee typically receives training from both the franchisor and Master Franchise.

Master Franchise relationships have diminished in the States over the years in favor of Area Development agreements. However, Master Franchise agreements are used by most systems in entering into international markets. These are sometimes called International Master Franchise or International Master Licensees (IMLs).

No votes yet

About Bob Frankman

Bob Frankman's picture

Public Profile

I'm a franchise owner and I tell it like I see it.

Area of Interest
Franchise Operations