In exchange, the master franchisee receives a large percentage of the initial franchise fee and ongoing royalties, typically 50 percent, although with BodyOlogy it is 60%. The master franchisee usually agrees to a development schedule, which can include owning and operating their own units.
Finding a qualified master franchisee for expansion saves a franchisor the expense (and headaches) of setting up an infrastructure state by state to sell, train, and support franchisees. Partnering with a qualified master franchisee also solves many logistical issues for growth.
Surrendering more than half of the franchise fee and ongoing royalties to let the master franchisee do all the heavy lifting is well worth it, especially as the domestic economy continues to sputter. Master franchise partners usually have an existing business and infrastructure, experience in sales and marketing, and contacts with local financial institutions. In saying that, we have found a jewel in the crown with our new QLD Master Franchisees, no prior business experience, both husband and wife have spent the best part of their life in the defence forces, what better business fundamentals can you find these days, they have discipline, premium education, people skills and a strong desire to succeed!!
Both franchisor and master franchisee spare the other the need to reinvent the wheel: the master franchisee buys a proven system and known brand, and the franchisor takes advantage of the master franchisee’s existing business, contacts, and expertise. More than other forms of franchising, this is a partnership. And both are using other peoples’ money to grow.
Benefits to the franchisor also include rapid market penetration and brand dominance, since the master franchisee is motivated to sell as many units as possible to qualified candidates.