Master Franchisee A master franchisee has the obligation and right to open a number of locations in a given area. He also has the right to sell franchises to others who are looking to become franchisees. You act as a franchisor for these people who buy through master franchisee. Once you own and operate one or two locations, you can sell the rights to other franchisees, who can then open and operate more locations. These other franchisees are called the subfranchisees.
The different variations of master franchise relationships are as follows:
- The subfranchisees are required to sign the franchise agreement either with the franchisor or with the master franchisee.
- Either the franchisee or the franchisor holds the right to approve the new subfranchisees.
- Either the franchisee, or the franchisor or both will provide the required franchise training to the subfranchisees.
- The subfranchisees will be required to pay the fee directly to the franchisor or to the master franchise. Some form of combination of franchisor and master franchisee may also be used to collect fee from the subfranchisees.