The Master Franchise modality, by which the franchisor gives the franchisee the right to operate a franchise in a large territory (an entire country or a large region), is for many an attractive action to develop a new concept where it is acquaintance. But, how do franchising chains carry out the process of selling a franchise business? What aspects should we take into account before signing a contract of this type?
1. – Once the market where to implement the franchise has been analyzed, they carry out actions to directly attract potential franchisors within the target country, mainly through specialized sector fairs where through direct contacts with interest groups, therefore they seek support from consultants local or report on social networks such as LinkedIn, among others. In retail, for example, it is common to analyze local groups that have successful experience to offer them "master" rights, thus achieving a local partner who knows the market and how to act.
2. – Starting from point 1 and once an interesting number of references has been obtained, the selection begins, inviting the candidates to come to the headquarters to learn first-hand about the business model. After several weeks of negotiating the contract, the procedure to follow would be to sign an agreement or pre-contract that includes the fundamental aspects such as the city of opening of the franchise, the training process, approved suppliers. , established royalties, objectives, etc.
Franchising centers usually require the opening of two of their own units in the market before beginning expansion throughout the country. The reason is none other than to ensure that the master has sufficient experience through its own centers to be able to provide a training and assistance service to local subfranchisees.
3. – Then the objective will be to achieve, in a certain time, the subfranchised openings to guarantee the correct positioning of the brand in the market which, after all, is the purpose of the master franchise. The development plan in the market, as well as the training and initial assistance services, will mark the assessment of the right of entry to the master franchise.
Finally, we must take into account that in markets with legal uncertainty, the Headquarters prefer not to delegate marketing actions and investments to the master franchise, but prefer to carry them out directly from the headquarter, with the aim of not having medium or long-term problems with the ownership of the brand, which, although temporarily transferred to the master franchise, remains the property of the headquarters.
