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
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
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.