What is a Master Franchise?

We all know what a franchise is and who the franchisor and franchisees are, but what is a master franchise? 

“A master franchise is a franchising contract in which the master franchisor (the owner of the brand name) hands over the control of the franchising activities in a specified territory to a person or entity, called the ‘master franchisee’.”

For example, a US franchise can grant someone a master franchise in Canada, and that franchise will be responsible for selling more franchises. A master franchise can also be called a subfranchisor, because they will assume a role similar to the franchisor in a defined area. This are can be anywhere, from another country to a few states. The master franchise will get a percentage of the franchise fee and royalty fee from each franchise that they sell.

Choosing to open a master franchise takes more research than opening a regular franchise. You must be comfortable with the franchise system and the company business model.

For more information about an Executive Care franchise, click here.

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