The Master Franchise or Sub-Franchisor Ownership is the most complex of ownership options. This type of ownership is less common in the United States and is more oftenly seen internationally. Within a Master Franchise Agreement, the “Master Franchisee” is granted the legal right to both sell Franchises and to approve and sign franchise agreements with sub-franchisees. Essentially, the Master Franchisee “steps into the shoes” as the Franchisor and maintains a direct relationship with Franchisees.
The key differentiating factor between an Area Representative and a Master Franchisee is that the Master Franchise Agreement grants the Master Franchisee to basically become the franchisor in an area that they are authorized to offer sub-franchises. The Master Franchisee will have their own Franchise Disclosure Documents and agreements, containing information about themselves and their offered services, and the Master Franchisees documents will be prepared by the Master Franchisor.
