What Is a Master Franchise?

Here are some points to consider before making your final decision:

• Know your responsibilities. A master franchisee is generally responsible for recruiting individual franchisees. As a master franchise owner, you're also responsible for providing support and training on an as-needed basis.
• Do your research. As a master franchise buyer, it's important for you to understand two entities: the franchise company and the master organization. Make sure, for instance, that the franchise system is based on a solid business model. Without a viable business model, it's unlikely that a master franchise could succeed. You will also need to research the market and territory demographics. Make sure that the territory has a population that can support your projected sales.
• Take a road trip. Your intelligence gathering should include actual visits to as many franchise locations as possible. If you detect any problems, cross this franchise off your list. Don't be tempted to rationalize red flags. If you sense trouble, regroup and consider another franchise system.
• Look for the right match. Even if the business model is solid, you'll want to make certain that the franchise suits your investment limitations and your goals. If you don't have the capital, then it's not a good match. If you're not interested in the business, then it's not a good match. Be prepared to walk away if the opportunity doesn't feel right.
• Pick one approach. Becoming a master franchiser versus buying one franchise isn't necessarily a better or smarter business move. What's important is that you choose either approach for the right reasons and with careful consideration. Running a master franchise requires a different set of skills than owning one franchise. The skills for building strong sales, for instance, are not the same as those needed to operate the business successfully.
• Interview successful master franchisees. If possible, try to talk to other people in the master franchise field. Find out, for instance, what kinds of challenges they face, what kind of support is available, and if they had to do again, what they would do differently. If speaking with other master franchise company owners isn't possible, search the Internet, go to the library, and do whatever you can to immerse yourself in the language of a master franchise. The more you know the better off you'll be.