What is a Master Franchise 

Maree McSweyn - November 2018 

When a business is successful and looking to continue growth, owners will look to expand their business through franchising.

A franchise is a business relationship in which the owner of the business assigns independent people the right to market and distribute their goods or service, and to use the business name for a fixed period of time.

To understand franchising, there are several terms that you will need to be familiar with;

  • Franchisor: a  person or company that grants the license to a third party for the conducting of a business
  • Franchisee: an individual or company that holds a franchise for the sale of goods or the operation of a service.

There are different ways to franchise a business. This includes;

  • Direct Franchising: Under this model, the franchisor grants the franchisee the right to open one franchised business at one location. Additional franchises may be granted after the performance of the first location is reviewed. The area is considered to be 'developed', when the franchisor grants the franchisee the exclusive right to open and operate several franchised businesses within a much broader geographic territory.

Franchise Model

  • Master Franchising: In this case, the owner of the brand grants the franchisee the right to a wide territory. The franchisee will then be given the right to ‘sub-franchise’, meaning they can recruit franchisees below them to operate franchises within their territory (rather than operating themselves). This then adds another tier to the above model. 

 The Master Franchisor is typically responsible for:

  • recruiting the individual master franchisees
  • developing the brand
  • creating systems and processes
  • providing initial training
  • providing ongoing support.

The Master Franchisee is typically responsible for:

  • understanding the processes and systems provided by the master franchisor
  • recruiting individual franchisees
  • providing initial training and ongoing support to the franchisees
  • promoting the brand and maintain the corporate image
  • promoting the territory 
  • provide ongoing leadership to the franchisee
  • supplying materials to franchisees.

The Franchise is typically responsible for:

  • recruiting and managing individual staff 
  • building and maintaining relationships with customers
  • providing an excellent stand of service
  • adhering to processes and systems provided by the master franchsior 
  • maintain corporate image
  • independently promote the business within their location.

If you would like to know more about investing as a master franchisee or expanding your business through direct franchising, we can help. Read more about how we have helped the Little ME Coffee & ME Coffee Merchants expand their brand. 

Contact a consultant today 1300 466 455 or find your local broker here

Master Franchise

If you are looking to develop and grow your business, it pays to speak to an expert to discuss the right option for you. Contact our team today, for a friendly chat about your situation.

Maree McSweyn 

1300 466 455 

email me