The Master Franchise Option
This is, perhaps, the most-used and the most often-recommended option.
Under a Master Franchise Agreement, the franchisor grants the Master Franchisee the rights to operate in the chosen market in exactly the same way as the franchisor operates in its own domestic market.
Key advantages to this method:
- The Master, who will typically be a native of the target country, will be already well-versed in the language, laws and culture of the country and will use that knowledge to supplement the franchisor’s knowledge of the system.
- They may already have a management structure in place from an existing business as they may have their own or other franchised brands already operating in the territory
- They are likely to have, or have access to, the substantial finances which will be required to develop the brand in the new territory
- The original franchisor will benefit from a substantial Initial Franchisee Fee which will largely be made as an up-front payment when the Master Franchise is granted.
- The original franchisor’s management input will be limited other than as a monitoring and advisory role