In Part 2 of my discussion of The Master Franchise, I will go into the business model itself….
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As the owner of a Master Franchise, you are really the CEO of your own franchise company, in my view. Here is what your business model will look like, on an organizational chart:
CEO {You}
Office Manager
Sales Manager Operations/Training Manager
Salesperson Trainer
If you own Master Rights to a retail type franchise operation, like a health/nutritional products store {GNC}, your office will have two major functions:
1. Market and Sell franchises
2. Train and support franchise owners
If you own Master Rights to a service type opportunity like a commercial cleaning {Jan Pro}, your office has these three functions:
1. Market and sell franchises
2. Procure accounts for your franchisees
3. Train and support your franchisees
Investing in a Master Franchise opportunity is not for the meek. You must go into it knowing that you will work harder than you ever have. You will be investing over $250k just for the rights to a geographical area, before you even lease space, or hire employees. If you are purchasing the rights to a retail type Master Franchise, there will be the additional cost of building out your first store, and use it as your prototype showpiece. {Figure another $200k+} For a service type Master Franchise, there will be no huge build-out costs involved, but you will have to lease a space for your office, and have enough room for training, and supplies etc.
Here Is Part 3-$$$
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in regards to the usual 50/50 franchise fee and royalty split – In negotiating the master franchise rights, i would assume the larger and sound the franchise is, the less you can negotiate – however if you are dealing with an under-developed one, would you agree that this could give you leverage in structuring a more favorable deal? thanks – very insightful site
Very informative post. I owned a sign company for 7 years and opted not to purchase a Franchise when starting up. I sold the company in it’s 8th year and have recently learned it is now closed. I often ask myself.. if I had chosen to become part of a Franchise,would I still be operating it today.??? That’s a difficult question to answer and hind sight is 20/20. I now am involved with Global Resorts Network and am very happy with this decision.
Thanks for your wonderful insight to the world of Franchising.