Master Franchisee is a contract through which the Franchisor (owner of the brand) gives the control of the franchising activities in a specified territory to a person or an entity. That person/entity is referred as Master Franchisee.
Now, one may ask that what is the need to give away the rights of your business to someone else. Well, there are many benefits that the franchisors get in return and here is a list of them.
- Easier Expansion
In return for the rights, the franchisor enjoys royalty from the master franchisees. Since the master franchisees also have to earn profits over and over this fee, they make sure they work harder and sell more franchisees thereby expanding the brand. - Breaks Geographical barriers
Every state has different laws, taxes, rules. It gets very difficult to work around them especially when the land is unknown to the owners. Therefore with Master Franchisee, one can get rid of this stress. - Easier planning
Making plans with Master Franchisees is easier because in a way one can easily assess the profits and losses of each one of them. The master franchisees who are underperforming can then be contacted and their paths can be altered. - Regular Cash Flow
The royalty fees given by the Master Franchisee is a regular income for the business. It ensures that the Franchisor is earning regular profits. - Proximity to the customer
Master Franchisees know their territory well. So, they also make sure that the franchisees are given in places where customer proximity is highest. This benefits the overall brand. - Easier Feedback
Master Franchisees are in regular touch with all the franchisees in their territory. Due to this, collecting important feedbacks becomes easier. The effect of exciting offers, sales and other marketing strategies can thus be quickly analysed and changed accordingly.
Also read: What is a Master Franchisee?
Giving away a Master Franchisee in no way means that the Franchisor can sit back and relax without worrying about the franchisee. At the end of the day, it is your brand. Any error made by the franchisee will be blamed on you. Therefore it is very important that you are always available for your master franchisees and franchisees. Keep regular meetings. Listen to them and convey your messages in the best possible manner.
If you are looking to expand your business through the franchise model or if you are looking to buy a franchisee, please contact Franchisezing. You can call us at 97178-99655 or email us at info@franchisezing.com