{"id":10264,"date":"2021-07-29T15:06:00","date_gmt":"2021-07-29T14:06:00","guid":{"rendered":"https:\/\/www.franchiselocal.co.uk\/news\/?p=10264"},"modified":"2022-01-27T10:50:31","modified_gmt":"2022-01-27T10:50:31","slug":"what-is-a-master-franchise","status":"publish","type":"post","link":"https:\/\/www.franchiselocal.co.uk\/news\/what-is-a-master-franchise\/","title":{"rendered":"What is A Master Franchise? The Full Guide"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_88 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #101010;color:#101010\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #101010;color:#101010\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 eztoc-toggle-hide-by-default' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"#\" data-href=\"https:\/\/www.franchiselocal.co.uk\/news\/what-is-a-master-franchise\/#what-is-franchising\" >What is franchising?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"#\" data-href=\"https:\/\/www.franchiselocal.co.uk\/news\/what-is-a-master-franchise\/#who-are-the-players\" >Who are the players?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"#\" data-href=\"https:\/\/www.franchiselocal.co.uk\/news\/what-is-a-master-franchise\/#what-is-a-master-franchise\" >What is a Master Franchise?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"#\" data-href=\"https:\/\/www.franchiselocal.co.uk\/news\/what-is-a-master-franchise\/#how-does-a-master-franchise-work\" >How does a Master Franchise work?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"#\" data-href=\"https:\/\/www.franchiselocal.co.uk\/news\/what-is-a-master-franchise\/#why-master-franchising\" >Why Master Franchising?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"#\" data-href=\"https:\/\/www.franchiselocal.co.uk\/news\/what-is-a-master-franchise\/#master-franchising-%e2%80%93-the-pros-and-cons\" >Master Franchising &#8211; The Pros And Cons<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"#\" data-href=\"https:\/\/www.franchiselocal.co.uk\/news\/what-is-a-master-franchise\/#conclusion\" >Conclusion<\/a><\/li><\/ul><\/nav><\/div>\n<span class=\"span-reading-time rt-reading-time\" style=\"display: block;\"><span class=\"rt-label rt-prefix\">Reading Time: <\/span> <span class=\"rt-time\"> 4<\/span> <span class=\"rt-label rt-postfix\">minutes<\/span><\/span><p>If you\u2019ve started thinking about franchising as a career or retirement plan, you\u2019ll no doubt already be aware that there\u2019s a lot of terminology surrounding this business model; some of which can be a little confusing. One of these terms is \u2018master franchise\u2019 and, in this article, we\u2019re going to untangle this important facet of franchising.<\/p>\n<p>First, though, let\u2019s get a few other things straight:<\/p>\n<h2><span class=\"ez-toc-section\" id=\"what-is-franchising\"><\/span>What is franchising?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>The word \u2018<a href=\"https:\/\/www.franchiselocal.co.uk\/news\/franchise-meaning-in-business\/\">franchise<\/a>\u2019 refers to a business that allows individuals to grab themselves a slice of a larger business by setting up their own branch. Examples of franchised businesses include <a href=\"https:\/\/www.franchiselocal.co.uk\/local-eats\/\" target=\"_blank\" rel=\"noopener\">Local Eats<\/a>, <a href=\"https:\/\/www.franchiselocal.co.uk\/amazon-logistics\/\" target=\"_blank\" rel=\"noopener\">Amazon Logistics<\/a> and <a href=\"https:\/\/www.franchiselocal.co.uk\/revive!\/\" target=\"_blank\" rel=\"noopener\">Revive!<\/a>.<\/p>\n<p>How it works is this; an individual who wants to start their own business but doesn\u2019t want the expense and risk of starting from scratch will pay an initial fee to a larger company to buy the rights to open up a branch of that company. The individual will then pay the larger company a <a href=\"https:\/\/www.franchiselocal.co.uk\/news\/franchise-royalty-fees\/\">percentage<\/a> of their monthly takings.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"who-are-the-players\"><\/span>Who are the players?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>There are two main players in the franchise game and, these are:<\/p>\n<p><strong>The Franchisor<\/strong> &#8211; This will usually be a large, established company that has a business model which can be easily transferred and replicated. Franchising allows the <a href=\"https:\/\/www.franchiselocal.co.uk\/news\/the-difference-between-a-franchisor-and-franchisee\/\">Franchisor<\/a> to expand their business quickly and easily without a huge amount of up-front costs.<\/p>\n<p><strong>The Franchisee<\/strong> &#8211; This is the individual who buys into the franchisor\u2019s business and will open a store or branch of the business in their local area. For the <a href=\"https:\/\/www.franchiselocal.co.uk\/news\/the-difference-between-a-franchisor-and-franchisee\/\">franchisee<\/a>, this is a great way of getting started in business where a lot of the hard work has already been done for them.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"what-is-a-master-franchise\"><\/span>What is a Master Franchise?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>We\u2019ve talked about our two main guys &#8211; the <a href=\"https:\/\/www.franchiselocal.co.uk\/news\/the-difference-between-a-franchisor-and-franchisee\/\">Franchisor<\/a> and the <a href=\"https:\/\/www.franchiselocal.co.uk\/news\/the-difference-between-a-franchisor-and-franchisee\/\">Franchisee<\/a> and, now, it\u2019s time to introduce the Master Franchisee.<\/p>\n<p><strong>The Franchisor<\/strong> is an established company that allows people to open new company branches in selected locations while using their branding, business tools and experience.<\/p>\n<p><strong>A Master Franchisee<\/strong> is, essentially, a \u2018mini Franchisor\u2019. Rather than just buying a single franchise from the Franchisor with a modest initial fee, the Master Franchisee will pay a larger fee to obtain the right to expand the Franchisors business within a particular region exclusively. For example, a business person in Leeds might visit a branch of a sandwich shop, Subway, on a trip to Bradford &#8211; and may note that there are very few branches of the brand within Yorkshire. He may then approach Subway with a Master Franchise proposal, with which he would seek to set up multiple franchises within the county.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"how-does-a-master-franchise-work\"><\/span>How does a Master Franchise work?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>As we know, during a simple franchise transaction, the Franchisee <a href=\"https:\/\/www.franchiselocal.co.uk\/news\/franchise-royalty-fees\/\">pays an initial fee<\/a> to secure a franchise business and then pays a chunk of their profits to the Franchisor every month. A Master Franchise works a little differently.<\/p>\n<p>A Master Franchise involves a holy trilogy of participants and, these are:<\/p>\n<ul>\n<li>The Franchisor<\/li>\n<li>The Master Franchisee<\/li>\n<li>The Franchisees<\/li>\n<\/ul>\n<p>Within the Master Franchise agreement, the Master Franchisee will be tasked with opening a minimum number of franchises within a town, city or country. A Master Franchise contract will generally be longer than a standard franchise agreement and will often cover 10 or 20 years. During the period of the agreement, the Master Franchisee\u2019s responsibilities will include:<\/p>\n<ul>\n<li>Sourcing of suitable premises for new franchises.<\/li>\n<li>Performing market research on selected areas.<\/li>\n<li>Recruitment of Franchisees.<\/li>\n<li>Training of Franchisees.<\/li>\n<li>Management of <a href=\"https:\/\/www.franchiselocal.co.uk\/news\/franchise-royalty-fees\/\">fees<\/a> to be paid to the Franchisor by each Franchisee.<\/li>\n<\/ul>\n<p>The role of Master Franchisee is best suited to those with significant business acumen and experience as well as the following skills:<\/p>\n<ul>\n<li>Knowledge of the region<\/li>\n<li>Recruitment and training skills<\/li>\n<li>Negotiation<\/li>\n<li>Communication<\/li>\n<\/ul>\n<p>Because of the skills and experience needed, in most cases, it will be necessary for Master Franchisees to reside in the town or country in which they will be operating their franchise businesses.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"why-master-franchising\"><\/span>Why Master Franchising?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Master Franchising is often a logical next step for a large business that is expanding faster than single franchises can facilitate.<\/p>\n<p><strong>For the Franchisor<\/strong> &#8211; Grabbing the services of a Master Franchisor means that the Franchisor can hand over the reins of the business for a particular region, leaving it free to focus on other areas. This allows the business to open more branches and, therefore, make more money at a rate of knots.<\/p>\n<p><strong>For the Master Franchisee<\/strong> &#8211; This opportunity allows the Master Franchisor to control an entire region as a mini or sub Franchisor and reap the financial benefits. They will often receive between 40% and 75% of royalties and fees from the franchises within their territory.<\/p>\n<p><strong>For the Franchisee<\/strong> &#8211; The Franchisee will enjoy the profits from their franchise business, as well as support from a locally based Master Franchisor.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"master-franchising-%e2%80%93-the-pros-and-cons\"><\/span>Master Franchising &#8211; The Pros And Cons<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Master Franchising can be pretty beneficial for all involved. However, before we get too carried away, we\u2019ll look at a few of the pros and cons of the master franchise model:<\/p>\n<p><strong>The Pros<\/strong><\/p>\n<ul>\n<li>The Franchisor receives a large financial injection in the form of the fee paid by the Master Franchisee.<\/li>\n<li>The Franchisor can achieve speedy expansion.<\/li>\n<li>The Franchisor\u2019s time is freed up.<\/li>\n<li>The Franchisor can take advantage of the Master Franchisees local knowledge.<\/li>\n<li>The Master Franchisee, if successful, can make a large amount of money from their franchise businesses.<\/li>\n<li>The Master Franchisee gains a higher profile within the region.<\/li>\n<li>The Master Franchisee gains access to an established brand.<\/li>\n<\/ul>\n<p><strong>The Cons<\/strong><\/p>\n<ul>\n<li>The Franchisor will need to relinquish an amount of control over the particular region that the Master Franchisee takes over.<\/li>\n<li>The Franchisor\u2019s brand may potentially be diluted if not managed properly.<\/li>\n<li>The Franchisor runs the risk of reputation damage if the region is not managed effectively by the Master Franchisee.<\/li>\n<li>The Master Franchisee\u2019s role can be stressful as it involves managing multiple branches.<\/li>\n<li>There are lots of complex rules and guidelines to follow, and the Master Franchisee can be penalised if any of these are breached.<\/li>\n<li>The Master Franchisee stands to lose their stake if their franchise businesses fail.<\/li>\n<\/ul>\n<h2><span class=\"ez-toc-section\" id=\"conclusion\"><\/span>Conclusion<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>A Master Franchise business can be extremely lucrative for both the Franchisor and the Master Franchisee and allow the Franchisor to grow their business into new territories quickly. As with any business, there are some pitfalls to avoid and it\u2019s always a good idea to have a solicitor run through a Master Franchise agreement before signing on the dotted line.<\/p>\n<p>In 2021, <a href=\"https:\/\/www.franchiselocal.co.uk\/franchising\/\">franchising<\/a> is big business in the UK &#8211; with over <a href=\"https:\/\/www.franchiselocal.co.uk\/news\/why-is-franchising-growing\/\">48,000 franchises<\/a> currently operating. Getting in on this action is a fantastic way of getting into the world of business armed with realistic financial goals and a great support network.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>If you\u2019ve started thinking about franchising as a career or retirement plan, you\u2019ll no doubt already be aware that there\u2019s a lot of terminology surrounding this business model; some of which can be a little confusing. One of these terms is \u2018master franchise\u2019 and, in this article, we\u2019re going to untangle this important facet of [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":10265,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[1467],"tags":[],"class_list":["post-10264","post","type-post","status-publish","format-standard","has-post-thumbnail","category-franchise-information"],"acf":[],"jetpack_featured_media_url":"https:\/\/www.franchiselocal.co.uk\/news\/wp-content\/uploads\/2021\/07\/What-is-A-Master-Franchise.jpg","_links":{"self":[{"href":"https:\/\/www.franchiselocal.co.uk\/news\/wp-json\/wp\/v2\/posts\/10264","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.franchiselocal.co.uk\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.franchiselocal.co.uk\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.franchiselocal.co.uk\/news\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.franchiselocal.co.uk\/news\/wp-json\/wp\/v2\/comments?post=10264"}],"version-history":[{"count":0,"href":"https:\/\/www.franchiselocal.co.uk\/news\/wp-json\/wp\/v2\/posts\/10264\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.franchiselocal.co.uk\/news\/wp-json\/wp\/v2\/media\/10265"}],"wp:attachment":[{"href":"https:\/\/www.franchiselocal.co.uk\/news\/wp-json\/wp\/v2\/media?parent=10264"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.franchiselocal.co.uk\/news\/wp-json\/wp\/v2\/categories?post=10264"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.franchiselocal.co.uk\/news\/wp-json\/wp\/v2\/tags?post=10264"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}