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A master franchise is a franchise relationship in which the owner of the franchise brand (the master franchisor) grants to another party the right to recruit new franchisees in a specific area. In exchange, the other party typically pays some price as well as agreeing to take on some or all of the responsibility to train and support new franchisees in their area. Because the role of a master franchisee within their territory is similar to that of a franchisor, they are often referred to as sub-franchisors.[1] As of 2020, according to an in-depth survey of franchisors based in the United States, approximately 20% of franchisors use master franchising as an international growth strategy. According to the research, it is the most popular (either by itself or in conjunction with multi-unit development), method for U.S. franchisors to expand abroad.[2]
- ^ "The Perils of Third Parties Selling or Servicing Your Brand: Broker, Area Representative and Area Developer Programs". American Bar Association 34th Annual Forum on Franchising: 5.
- ^ 2020 Annual Franchise Development Report. Franchise Update Media. 2020. p. 24. Retrieved 30 May 2021.