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01 Apr 2024

Master Franchise Explained: What Role Do They Play?

Sometimes one isn’t enough. For example, for experienced and ambitious business owners, sometimes one business location isn’t enough. You’ve set your sights on something higher than owning and operating a single store. You feel ready to spread your roots further, to make an even bigger impact in your market and your industry. But you like the franchising model of business and would rather stay in it than try to start multiple locations on your own. Fortunately, there’s another option: master franchises. Let’s take a look at how they work, and what it takes to becomes a master franchisee.

Understanding Master Franchises

Master franchising is the practice of operating multiple franchise locations at once. As a master franchisee, you act essentially as a sub-franchisor for your brand within a set territory, recruiting and training single-location franchisees for each location in your designated area, or hiring site managers to operate them.

This form of franchising has a lot of potential, as people have discovered. According to a March 2024 report from franchising information company FRANData, over 50% of all active franchise units in the U.S. are operated by multi-unit owners. Being a master franchisee comes with the opportunity for greater profits simply by having more locations operating in more places catering to a bigger customer pool. However, this franchising model also comes with some risks, as it requires a bigger capital investment to open multiple locations. The burden of ability is also on you; since you’ll be acting as a sub-franchisor to multiple locations, you need the business acumen to handle the responsibilities.

Duties and Responsibilities

So, what comes with the territory, no pun intended, of being a master franchisee? Your responsibilities will include the following:

  • Recruiting and training single-location franchisees or hiring site managers to handle the day-to-day operations of each location.
  • Setting up a billing system and collecting payments from each franchise location.
  • Developing and implementing effective marketing strategies and advertising campaigns for the franchise locations in your territory.
  • Performing quality control by monitoring the overall performance of your locations, making sure that they adhere to the standards set by your brand.

Starting Your Own Master Franchise

Becoming a master franchisee starts with obtaining the necessary business chops. A franchisor will expect you to know enough about how to run a franchise so it doesn’t need your daily oversight when you move on to start the next one. This may take some time while you gain the necessary experience, so don’t be afraid to start by running a single location franchise to learn how it’s done.

When you feel ready to look for a master franchise for sale, you’ll sign a master franchise agreement with the franchisor. Unlike a basic franchise agreement, this one will include some additional information and conditions. One of the most important of these is a stipulation that you will open a set number of locations in a set amount of time within your designated territory. For the franchisor, the benefit of the master franchise agreement is the ability to establish a large market presence in a short amount of time, so you’ll be expected to provide that. In return, you’ll receive an exclusive territory, which is an area the franchisor designates for you alone, not allowing any other franchisees or the franchisor itself to set up locations in your area.

Lastly, master franchises require dedication. You’re going to be in it for the long haul; where most basic franchise agreements are about 10 years, for a master franchise agreement, 10 years is usually the minimum. Make sure you’re prepared to commit to that kind of a time investment before you start.

Becoming a master franchisee means taking on more responsibility as a business owner. But with that responsibility comes the chance for greater financial and professional growth, as well as the chance to make an even bigger impact in your market and local communities.

Find Your Master Franchise Opportunities with MFV

Whether you want to open one franchise or a dozen or more, we at MFV are here to help. We have over 32 years of experiences bringing the franchising world together, connecting franchisor and franchisees in all types of franchises. Our franchising expos are a great place to make connections, see which brands are looking for eager entrepreneurs, and attend workshops and presentations from industry experts. Don’t miss all the franchising opportunities you could learn about; request attending info today to find out how you can be at the next MFV Expo near you.
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