Whilst owning your own franchise can be very profitable buying a Master Franchise is even more so because of its additional income streams. When you buy a Master Franchise you are awarded rights under agreement by a franchisor to use its marks, technologies and systems to enable you to build your own network of franchisees within your designated territory. Franchisors use this method to allow investors like you to buy a Master Franchise to grow their franchise much quicker than the traditional franchisee roll out. As a result they share the profits with you as the business expands.
With the help of your franchisor you would advertise the opportunities available for franchisees in your territory. Franchisees would be selected from the applicants for territories based on the Franchisors pre determined criteria that you would use to ensure that successful applicants exploited the profit potential of their allotted territory which ultimately would result in the revenue growth of your business. Because franchising is systemized a specialist Franchise Broker may have been appointed to handle franchisee sales and this would mean that you would not have to handle any initial inquiries, meet with franchisee prospects or follow up on those meetings. The broker would handle all this for you from leads generated by approved advertising online or other methods suggested by the Franchisor. This would reduce your workload considerably allowing you to spend your time on meeting qualified applicants with the broker to see if you wish to select them to be part of your franchise team and also handling the support side of your business.
If you buy a Master Franchise you can earn income from multiple income streams; firstly you earn a share of the initial franchise fee paid by the successful applicant to join your franchise network, secondly you earn a share of the weekly franchise fee paid by the franchisee which is usually calculated as a percentage of the gross revenue of their business and thirdly you can also share in the profit generated by the products that your franchisees order through you that they require to service their customers. The idea is to profit from each franchisee appointment and then to enjoy ongoing income as your network expands.
The opportunity is there for you to build a substantial income with the potential for significant capital gain. Effectively build your network then profit every time someone is serviced within it.
When you buy a Master Franchise as opposed to starting your own business you have a head start as the Franchisor has gone through the initial start up phase of the business and developed the methods and technologies required in building a successful franchise. They will have implemented procedures and systems all of which will have been outlined in comprehensive operations manuals. You have the business opportunity of being part of something that is already geared for growth and the support of the franchisor that partner with you for mutual benefit.
Depending on your investment level you can secure a prime territory with a significant share of the percentages on offer from revenue. You should look for a Master Franchise opportunity with an area large enough for you to maximize your yield on investment. Outsourcing the support roles can free your time up further so with your Franchisor, the Franchise Broker and the ongoing support person you can concentrate you time on building the Master Franchise business rather than the day to day running of it.
Not all franchise will use the Master Franchise model to roll out their territories, as they need to give away a significant share of the profits to a master so you need to look to find the opportunities. Franchises or Businesses for sale websites or Brokers websites are the best place to start. Generate a list of those that appeal to you and then research online or shorten your list down to those that you will follow up. Then follow the path any franchisee would by contacting the relevant Franchisor to request information on the Master Franchise opportunity that is on offer. Be aware that confidential information as to methods and profitability will not be discussed on the phone and usually you would be required to sign a confidentiality agreement and meet face to face to find out all about what is on offer.
Meet the person who owns the Franchise as they will be the person you are working with on your new venture, discuss with them what has been achieved and what their vision of the business is and ask what plans are in place to achieve those aims. Remember their goals will be the blueprints for your success so make sure that you both have a synergy of purpose before deciding on proceeding. Then request a copy of the Franchisors Disclosure document, which should outline all the initial and ongoing costs to be part of the Master Franchise Business. Seek professional advice on the documents before committing to signing them. Having a successful Master Franchise can be very lucrative especially if you get involved in the initial growth phase of a Franchise that will build into a successful model.
Ensure that your Master Franchise Opportunity includes your own outlet. This will give you credibility with your franchisees but more importantly it should give you cash flow from when it opens. If the Master Franchise you have chosen is new to your territory it will also provide a point of reference for your prospective applicants. The opportunities are there for you to be in business for yourself but not by yourself.