Master Franchisee: What It Is and How to Become One

In the world of franchising, there are many strategies that a franchise brand may utilize for growth. One growth strategy is to use a master franchisee, sometimes referred to as master franchisors, area representatives, or sub-franchisors.

Generally, franchisors either deal with franchisees directly or through a master franchisee.

Using a master franchisee is an efficient way for larger brands to manage and interact with franchisees.

Brand Growth Strategy

Master franchisees serve as a liaison between prospects and franchisors in specific territories or regions. Operational control and discretion are given to these area representatives after careful recruitment and training.

Master franchising means the area representative is a mini-franchisor for a specific region. Within that territory, the master recruits, trains, and provides ongoing support to each franchisee they sign on. The representatives themselves may own and operate a small number of the units in their territory directly, but their main focus is recruiting and growing the brand.

If a brand is growing with a sub-franchisor, there is a contractual agreement with this person or entity to service a specific territory, market, region, or country. This strategy is often used by franchises for international growth. Master franchisees are often in charge of brand development for an entire country, and in this type of franchising agreement, they pay the franchise company a substantial initial fee for the rights to develop their territory.

Compensation and Experience

As the area grows, the sub-franchisor recoups their capital by holding onto a percentage of the initial fees and royalties paid by new franchisees.

The master franchisee receives a large percentage, sometimes 50% of the initial franchise fee and ongoing royalties, although it varies depending on the brand.

This is a mutually beneficial arrangement as a sub-franchisor is compensated for developing an area on behalf of the franchise brand. If the franchise has chosen master franchisees wisely, there is opportunity for rapid growth.

Most sub-franchisors have sales and marketing experience and a solid understanding of the franchise system and brand. The franchise benefits from the recruitment potential of the area representatives, who uses their expertise and contacts to grow their region. Not only will the master recruit new franchisees in their region, but they’ll also provide all the training and support just as a franchisor would. They truly operate as a mini-franchise or offshoot of the parent company.

Is This a Job for You?

If you’re interested in becoming a master franchisee, a background in business will serve you well. Franchise experience is a bonus but often not required. The franchise brand typically should provide training to qualified candidates.

Beyond business acumen, the qualification process requires an in-depth look at financial resources and capital that would be required to cover the costs of the master franchise license and introducing a brand into a new region. This is a big job with plenty of challenges, but the more franchisees you recruit, the more lucrative this arrangement is for you and the franchise.

It is a profitable franchising path if you sign on franchisees and train and support them so that their location is successful. Your income is dependent on your recruiting skills because you get a percentage of franchise fees. Plus, retention is key as you will continually make a portion of the monthly royalties.

Profitability from Home Franchise Concepts 

There are many paths that lead to franchise ownership and profit potential. If you want the freedom to be your own boss in a home services business, consider franchising with Home Franchise Concepts. You have the best of both worlds as you build your business and control your financial future with the backing of a leader in the home services industry.

Advantages include a low-cost investment, large protected territory, minimal overhead and inventory, and flexible scheduling.

Discover our brands: Budget Blinds®, The Tailored Closet®, PremierGarage®, Concrete Craft®, AdvantaClean®, Lightspeed Restoration®, Kitchen Tune-Up®, Bath Tune-Up®, Two Maids®, and Aussie Pet Mobile®.

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