UK Master Franchises
Some of the candidates I work with as a franchise consultant are looking for much more than just a single unit franchise business. In fact, some envision being in control of the rights of a particular franchise, their own "empire" you might say, while having the ability to sub-franchise that concept within a large specified territory.
Try to picture a scenario where potential business owners contact you with the desire to be one of your franchisees. Master franchising allows the business owner to develop a large, extremely profitable business within a relatively short time period, systematically filling his territory with new locations, and, at the same time, generating income by way of franchise fees and royalties from each unit. Both the franchiser and the master franchisee are big winners in this relationship. The franchiser now has the ability to expand its brand much more rapidly and efficiently, as opposed to awarding one franchise at a time.
The master franchisee enjoys several benefits as well, including the 5 that I mention here:
Ongoing Royalties. As the master franchisee, you are now receiving a portion of the royalties from all of your franchisees within your territory, which enables you to draw very significant long-term residual income. This is the ultimate income source. Once you assist with setting up your franchisees, you receive royalty income for the rest of the life of those franchises. Can you see yourself receiving 3%, 4%, even 5% of your franchisee's volume each month?
Very few employees. Normally, you begin your master franchise by yourself. As the number of units increases, you may expand and hire an administrative assistant, a trainer, or another support person and possibly a franchise sales person to help manage the growth. Some master franchisees, after devoting several years to building their business, choose to semi-retire and live off of an extremely attractive residual income. Or, perhaps you may want to take advantage of the inherent flexibility to work on a new business venture. This may be an appealing scenario for others as well, depending upon the success of the business and the preference of the master franchisee.
Low Overhead. You won't require a large office, staff, and other expenses because your main role and focus is to sell your concept means low overheads. Meetings with potential franchisees are easily conducted in a home office, which, in itself, offers even more advantages, when you consider the tax benefits of this set-up.
Few Customers. You won't be required to deal with hundreds of customers as a single-unit franchisee might. In this arrangement, you'll be dealing with your franchisees, who are your true customers.
High Prestige Business Model. The prestige enjoyed from your role as a master franchisee and controlling an entire territory provides great satisfaction. Your main role will be that of a business consultant to your franchisees and showing them how to succeed in their own franchise. You will be associated with the recognized and respected brand name of the franchise as the main developer of a specific area.
The overall success rate of a master franchisee is extremely high. Of course, this business type is not for everyone, as a significant investment is required, much more than for a single unit. You're purchasing the rights to your own "corporation", and there is huge potential in the way of income and profitability. An experienced franchise consultant can help you evaluate the opportunities available to you, based on your specific requirements and background.
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