Different franchisors offer different programs or formats for franchising, ranging from single unit franchises to master or area development franchises. Fransmart works with our franchisor clients to determine which formats are most suitable for growth. For individuals pursuing a franchise opportunity, Fransmart will guide you through the different options available to find a franchise opportunity that suits your personal goals, requirements and finances.
Area Development Franchise or Master Franchise
What is Area Development, or Master Franchising?
In Area Development franchise agreements (also called Master Franchises), an area developer franchisee typically purchase the rights to develop and own an exclusive area development territory (typically a major market or region), and then sells portions of this territory to new sub-franchisees. Area develpment agents (also called master franchisees) then function as a ‘sub-franchisor’ and split the roles and responsibilities as well as the franchise fees and ongoing royalties with the franchisor.
What are the benefits of an Area Development or master franchise Agreement?
- Master franchisees are drawn to the potential for significant financial gains in a business with low overhead and few employees needed. However, that is not the only reason to investigate an area development opportunity— area development agents enjoy the benefits of an improved quality of life by owning their own business with exclusive area development territory rights, and the opportunity to grow as quickly as they want leveraging the capital and full time management of their sub-franchisees.
- Low Overhead: Especially in the beginning, area development operations can be run with little office space or from a home office. Typically, you will operate the area development franchise yourself, and potentially add just a few support positions to aid in your growth such as an administrative assistant, a franchise sales manager, or a field training and marketing manager. Once you reach a certain level of growth and success, you may opt to hire a district general manager to manage much of the area development operation.
- Few Customers: Your sub-franchisees will be your end customers. You will support a limited number of franchisees in your area development territory. Your sub-franchisees will support a large volume of customers in their daily operation.
- Wealth Building: Area development franchises offers an unparalleled opportunity for financial growth in the franchising industry, versus individual franchise operation or even multi-unit development businesses