When you enter the world of franchising, there are many strategies that a franchise brand may utilize for growth. One of the approaches is expansion with the use of a master franchisee, sometimes referred to as master franchisors, area representatives, or sub-franchisors.
Franchisors either deal with franchisees directly or with the use of a master franchisee. Often this management system is an efficient way for larger brands to interact with franchisees.
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A master franchise gives a franchisee the right to sell and open multiple franchises in a given territory.
Brand Growth Strategy
Master franchisees are a go-between dealing with prospects in a certain territory and franchisors. Operational control and discretion are given to these area reps after careful recruitment and training.
The reps themselves may own and operate a small number or none of the units in their territory directly. Instead, their main focus is to recruit franchisees to grow their territory, thus, the brand.
Master franchising means the area rep is a mini-franchisor for a specific region. Within that territory, the master recruits, trains, and provides ongoing support to each franchisee they sign.
If a brand is growing with a sub-franchisor, there is a contractual agreement with this person or entity to service a specific territory like a major market or one or more states. Often this strategy is used by a franchise for international growth. Master franchisees are often in charge of brand development for an entire country. They then 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 those 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 left in the hands of a qualified expert.
Most sub-franchisors have sales and marketing experience and a solid understanding of the franchise system and the brand. The franchise benefits from the recruitment potential of the area rep, 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 franchise 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 itself should provide training to qualified candidates.
A part of that qualification is not just business acumen, but capital. That will 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 navigating a territory or country for a brand. But the more franchisees you recruit, the more lucrative this arrangement is for you and the franchise.
It is a profitable franchise path if you sign on franchisees and train and support them so 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.
Now’s the time to learn more about the family of brands under Home Franchise Concepts and discover which brand is the best home services choice for you. Ready to learn more? Submit our contact form and we’ll reach out to get the conversation going.