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What is a master franchise?

A master franchise is a system of franchise development defined on three levels: franchisor, master franchisee, and franchisee.   AC Franchise is knowledgeable about the subject; it helped some French master franchisees to find international franchisors seeking to develop their network in France with the help of an intermediary who has a good knowledge of the country and is capable of financing this establishment.(Jani King, expert in office cleaning, signed a master franchise contract with Philippe Fisch after AC Franchise put them in contact; Philippe Fisch successfully passed the selection stages that the franchisor had imposed: the capacity to learn the concept, to finance development, to recruit franchisees and make them succeed… ) 

In a master franchise, the franchisor sells to the master franchisee the right to use his concept for one or more of his units; he is also responsible of developing the network in France by recruiting franchisees and playing the role of the franchisor to help them create and develop their business. Thus, the franchisees would not be in contact with a remote franchisor, but with the master franchisee who would become the franchisor in their country or region.   It is nevertheless rare for this system to function in a region, except in the case of the American region which regroups several states, or in the case of Belgium where despite of the country’s small size, national languages need adaptation.   The master franchisee must keep the franchisee updated on development and concept application; he transfers to the franchisor some of the royalties paid by the franchisees. 

Sometimes, people make the confusion between the master franchisee and the regional developer found in the United States. A regional developer is often a risky solution because he is rarely considered responsible for the failure of the franchisees he recruits; this is due to the fact that his income comes from entry fees, and is not a percentage of his franchisees’ success. 

Jean Samper
Member  of the “collège des experts de la fff”
Créator of ac-franchise.com and of the IFCN (International Franchise Consultant network)

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