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master franchise development can be lucrative

Master Franchise Development

Master franchise development is a form of franchise arrangement whereby the master franchisor grants rights to a franchisee to develop a specific territory as a ‘master franchisee’. The master franchisee essentially becomes the mini-franchisor for that area, taking on the responsibilities of recruiting, training and providing support for each franchisee they sign up to the franchise.

The master franchisee receives a large proportion of the franchise fees in return for building the franchise in that territory and usually pays the master franchisor a significant initial fee for the rights to develop the territory. Master franchise development can be an effective expansion strategy whereby the master franchisee uses the established brand while the master franchisor takes advantage of the master franchisee’s understanding of the area and existing relationships.

Is Master Franchise Development Right For Me?

Master Franchise Development can be an effective strategy for rapid expansion into unfamiliar territories, such as interstate or overseas. The master franchisee will be motivated to grow the franchise as quickly as possible as they will receive the benefit of the franchise fees and royalties. Their familiarity and existing business connections will also hasten the process.

However, master franchise development is a significant investment. It requires large amounts of capital both for the franchise agreement as well as for marketing and capital for the new territory. The master franchisor also faces the risk of contracting with a franchisee without the adequate management skills. The master franchisee, typically, will need strong sales, marketing and operational abilities to drive the franchise forward.

How Can LegalVision Help With Master Franchise Development?

LegalVision’s fixed-fee franchise lawyers can assist with all aspects of your master franchise development. Whether you are master franchising locally or internationally, we can help you to draft, review or customise your franchise agreements according to the laws of your intended jurisdiction. Further, we can provide the advice you need to decide whether this form of franchising is right for your circumstances, and our network of global partners means we can point you to the right people if you choose to expand overseas.

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