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Master Franchisee vs. Franchisee?

Written by: Dan Morris

Article Overview: Q: What is a Master Franchise or Area Representative? A: The BEST kept secret in business today…. Imagine sharing in the royalty income generated by all of the Subway Sandwiches’ or Domino’s Pizza’s operating within your city. A Master Franchisor shares in the income generated from the units operating within his/her territory. A Master Franchisor (also referred to as a sub-franchisor) is someone in the unique position of owning the rights to sell business franchises in a given area. This territory can be a major metropolitan area, an entire city or in some cases the whole State. The Master franchisor rarely works in the day-to-day operations of the unit; rather your job is primarily a business consultant to the franchisees.

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Master Franchisee vs. Franchisee?

How does this work?

A Master Franchisor buys the rights to market & sell franchises within a specific territory for a Franchised Company, such as Taco Bell. Not every franchisor offers master franchising opportunities however; those that do are utilizing this strategy to encourage more rapid growth. This could mean huge profit opportunities for you.

Often the best opportunities for Master Franchising are those with brand names you currently do not recognize. Have you ever thought about what it would’ve been like to be on the "ground floor" of McDonald's? Imagine having a concept that exploded into a business where people clamoring to buy your franchise.

Prestigious

In addition to selling franchises, the Master assumes the exciting role of business consultant to the franchisees to help them succeed. This is usually in the form of providing training, sales support and business development strategies. Most Master Franchisors find this to be the most satisfying part of the job.

Financial Freedoms

Unlike other business systems, Master Franchisors truly have the ability of turning their dreams of financial freedom into reality…

Here is a typical example:

You purchase a territory from an automotive franchisor or a computer franchisor for a certain amount of money (your investment). A typical territory can cost between $50,000 and $500,000.

Your agreement with the Franchisor may state that you will receive 50% of the franchise fee and 50% of the royalty income, for each unit sold or opened within your territory.

Let's assume that the franchise fee is $25,000 per unit and the royalty is 6%. That means that for each unit opened in your territory, you will receive $12,500 (50% of the $25,000 franchise fee).
Let’s go one step further; assume that each unit opened will have a gross yearly sales volume of $1,000,000. Each unit is then required pay a royalty of 6% of their gross sales, equally $60,000.

Want to learn more?
Because relatively few franchisors offer Master franchise opportunities, the ones that become available usually sell quickly. Go to www.masterfranchises.com see if there is a Master franchise in your future.

Dan Morris
www.automotivefranchises.com

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About the Author: Dan Morris
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Dan Morris brings 20 years of experience with Pizza Hut working his way up in operations. He retired from Pizza Hut as the Director of Operations and owner in the a 64-unit franchise. Dan also has other businesses that he owns and operates. Dan is currently the VP of Franchise Development for Honest-1 Auto Care, Inc., and their Master Franchisee for the state of Florida.

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