A master franchise business opportunity is offered by companies that have proven their business model in their own market. They then offer the value of their proven model for the purposes of replication in a new market. They offer this opportunity to an individual or company in the new target market for the purpose of replication and business success.

The Master Franchise buyer will enter into a trading agreement with the owner of the franchise brand. The brand owner will pass on the full know how of the brand and how to operate it successfully in the new market. For the transfer of this know how and ongoing training and support the master franchisee will pay an up front fee and an ongoing royalty to the brand owner.

Master franchises are suitable for investors with sufficient financial resources to develop a network of franchises in a specified country or region. A master franchise involves a major management role supported by the know-how and experience that come as part of a franchise package.

In general terms, these are the qualities the franchisor will be looking for in a master franchisee:

• Familiarity with the local market.
• Experience in the relevant industry (ideal, but not always essential).
• Proven financial resources. The master franchisee must have the wherewithal (either alone or with other investors) to buy the franchise rights, set up prototypes and systems, and develop the franchise business in the agreed territory.
• Proven management skills. For the most part, the master franchisee will be functioning in exactly the same way as the franchise does in its "home territory" (native country).

What is a Master Franchise?

What is a Master Franchise?

A master franchise is a form of franchising that enables business owners the right to sub-franchise within a specified geographical area. Through this concept, a master franchisee manages a single franchise while at the same time increasing the business by introducing other outlets into the allotted territory.

Role of the Master Franchisee:

The master franchisee should enter into this role with both sales and management experience, since he or she will not only operate a unit, but will also be responsible for the smooth operation of several other locations as well. Additionally, a master franchisee holds the responsibility of obtaining and educating other franchisees. He or she needs to be available for continuous support for the other franchisees.

Pros of Master Franchising :

This particular form of franchising offers the opportunity for the franchisee to participate in a business model that has already been proven successful. Also, rather than being alone in a business venture, the master franchisee usually receives continuous support and training from the experienced franchisor. Further, the franchisor typically passes along up-to-date technologies that can be useful in building the business.

Another advantage of becoming a master franchisee is that it is possible to hire skilled employees to help you manage your business while you continue to work at another position or operate another business.

The main benefit with regard to master franchising is that it is possible to build a decent business much more quickly than with traditional franchising. These franchisees have the advantage of earning a portion of not only the initial startup costs, but also obtaining continuous royalty payments from the franchisees within the master franchising organization.

Cons of Master Franchising:

One possible drawback of entering into master franchising is that the initial costs are usually quite a bit higher than investing in a regular franchise.

Another possible disadvantage is that there may be a great deal of extra time and resources involved in getting the master franchise organization up and running. Also the master franchisee must have great sales and management skills as well as organizational and multi-tasking skills in order to be successful.

What to be aware of before becoming a Master Franchisee

As with any business opportunity, research the possibility thoroughly before investing. Read all documentation and master franchise information with the assistance of financial and legal professionals. Also make sure to pay a visit to several of the franchise locations to see how they operate firsthand. It is also wise to speak with other master franchisees to understand how the entire concept works and find out if they have experienced any pitfalls that you would be able to avoid.

By and large, master franchising can be a very nice business opportunity, creating quite a decent income. However, it is important to find the best match for your skills and interests so that you have the highest chance for success.

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