How do I do master franchising

What is the difference between Franchise and Master Franchise?

Many people are already familiar with franchise as a form of distribution, not least because of well-known franchise brands such as McDonalds or Subway. Especially in relation to franchise systems that want to expand abroad, the term master franchising is often used. What is the difference to the “normal” franchise?

Master franchisee between franchisor and franchisee

The principle of Franchising and Master Franchising is basically very similar, only that in the case of master franchising with the master franchisee, there is a level between the head office of the franchise system and the individual franchisee at one location.

in the direct franchising the franchise head office is looking for franchisees who are self-employed with their business concept. A young franchise system usually has at least one pilot operation in which the concept has already proven itself. The Franchise headquarters gives your franchise partner their know-how and supports them in setting up their own franchise location. in the foreign countries this area of ​​responsibility is often taken over by an intermediate master franchisee.

Let's assume that a franchise system from distant America wants to expand to Germany. This means that it wants to find franchisees who like the concept that has already proven itself in America and who want to implement it in Germany, for example with a shop in Munich.

Now the American franchise system may have the problem that they have the German market, German culture and maybe not even know the German language. However, you may have to Business concept adapted a little to the German market so that it is accepted by the end customer. In addition, the American franchise system must offer the German franchisee a competent contact person and good support in order to meet the requirements of a good franchise system. A so-called master franchisee can take on this role.

Master franchisee = "franchisor" in their own country

The master franchisee acquires the right to use the business concept, the brand, etc. for an entire country or region. Here he steps in for the individual franchisee like a franchisor on: He adapts the concept and the contracts, looks for local franchise partners, enters into contract negotiations with them and supports them before and after establishing their independence as a franchisee

Basically, a master franchisee builds the franchise system in their country or region. Before looking for a franchise partner, he usually first has to set up his own pilot operation.

Like “normal” franchisees too Wanted: Master Franchisees of Franchise Systems. Master franchisees need sufficient experience and management and leadership skills and need more capital to be able to set up the franchise system in their own country. Franchise systems that are looking for master franchisees are listed in the FranchisePORTAL in the master franchising category.

Image: © Christina Deridder | Dreamstime.com

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Categorized in: From the Franchise PORTAL, Top Story Keywords: establishment, international, expansion, franchise, franchisee, franchise system, international, master franchise, master franchisee