72:
new franchisees in their area. Because the role of a master franchisee within their territory is similar to that of a franchisor, they are often referred to as sub-franchisors. As of 2020, according to an in-depth survey of franchisors based in the United States, approximately 20% of franchisors use master franchising as an international growth strategy. According to the research, it is the most popular (either by itself or in conjunction with multi-unit development), method for U.S. franchisors to expand abroad.
90:
franchise. They are removed from a direct management position. This duplication of the franchisor's role forms an additional layer of control in the general franchise system, which results in some small-scale inefficiencies on the small, local scale but greatly reduces the large-scale inefficiencies. Additionally, a master franchise allows the company holding the franchising permit to benefit from management talent and more and more accessible capital.
107:. Franchise agreements are needed to codify the enforcement of behavior. But, because all aspects of the franchise cannot be predicted, this requirement raises the opportunity for franchise shirking while reducing the overall ability to monitor all aspects of the franchise. Thus, some scholars hypothesize that "new franchise systems which employ master franchising are more likely to fail than are other new franchise systems."
94:
screening and training of subfranchisors, who then develop their area in a similar way, the overall growth rate of chains increases. Other benefits include faster development, a more comprehensive financial base, specific expansion plans, access to capital and a regular cash flow, proximity to the customer, some independence, and the ability to address the demands of the customers as well as address the local competition.
22:
71:
relationship in which the owner of the franchise brand (the master franchisor) grants to another party the right to recruit new franchisees in a specific area. In exchange, the other party typically pays some price as well as agreeing to take on some or all of the responsibility to train and support
93:
Combined, these two factors translate into almost instant penetration into the market and a competitive advantage, both of which increase system growth rates. Managerial levels and hierarchical framework exemplify one competitive advantage. By allowing the franchisor to specialize in recruiting,
89:
Generally, a master franchisor will grant the master franchisee, or subfranchisor, the right to third-party operations within a defined territory. And then, with respect to regional issues, the subfranchisor will assume the role of the franchisor, but they typically will not own or operate the
85:
to that of a large chain. The franchisor gives up the meticulous management of non-franchisor entities, but is still able to contain significant control over the look, feel, and branding of geographically dispersed individual businesses.
80:
In general, a franchise enables a product to be dispersed across more outlets and regions, solving many geographic concerns raised by large market companies. It allows the franchisor to distribute its product or services with similar
102:
Although master franchising can be beneficial and advantageous, there are also setbacks, including legal problems and overly long contracts. One specific setback of master franchises is the increase in
242:
219:
140:"The Perils of Third Parties Selling or Servicing Your Brand: Broker, Area Representative and Area Developer Programs".
190:
133:
115:
Generally, the types of business that would adopt a master franchise model are domestic cleaners,
180:
39:
262:
116:
43:
8:
223:
82:
186:
120:
215:
256:
220:
10.1002/(sici)1097-0266(199807)19:7<697::aid-smj972>3.3.co;2-f
104:
68:
227:
155:
178:
32:
206:
Scott A. Shane (July 1998). "Making New
Franchise Systems Work".
148:
240:
142:
American Bar
Association 34th Annual Forum on Franchising
254:
119:, computer equipment, real estate agencies, and
205:
38:There might be a discussion about this on the
179:Patrick Kaufmann and Sang Hyeon Kim (1995).
182:Master Franchising and System Growth Rates
160:. Franchise Update Media. 2020. p. 24
157:2020 Annual Franchise Development Report
255:
15:
13:
14:
274:
75:
243:"Master Franchising: A New Look"
241:Robert Justis and Richard Judd.
20:
234:
199:
172:
1:
126:
208:Strategic Management Journal
97:
7:
110:
10:
279:
31:contain a large number of
29:This article appears to
121:convenience food stores
117:fast food restaurants
44:improve this article
83:economies of scale
61:
60:
270:
247:
246:
238:
232:
231:
203:
197:
196:
176:
170:
169:
167:
165:
152:
146:
145:
137:
65:master franchise
56:
53:
47:
24:
23:
16:
278:
277:
273:
272:
271:
269:
268:
267:
253:
252:
251:
250:
239:
235:
204:
200:
193:
177:
173:
163:
161:
154:
153:
149:
139:
138:
134:
129:
113:
100:
78:
57:
51:
48:
37:
25:
21:
12:
11:
5:
276:
266:
265:
249:
248:
233:
214:(7): 697–707.
198:
191:
171:
147:
131:
130:
128:
125:
112:
109:
99:
96:
77:
76:Business model
74:
59:
58:
52:September 2019
42:. Please help
28:
26:
19:
9:
6:
4:
3:
2:
275:
264:
261:
260:
258:
244:
237:
229:
225:
221:
217:
213:
209:
202:
194:
192:9781560247296
188:
184:
183:
175:
159:
158:
151:
143:
136:
132:
124:
122:
118:
108:
106:
95:
91:
87:
84:
73:
70:
66:
55:
45:
41:
35:
34:
27:
18:
17:
236:
211:
207:
201:
181:
174:
162:. Retrieved
156:
150:
141:
135:
114:
105:agency costs
101:
92:
88:
79:
64:
62:
49:
30:
263:Franchising
46:if you can.
127:References
98:Drawbacks
69:franchise
40:talk page
33:buzzwords
257:Category
111:Examples
228:3094151
226:
189:
164:30 May
224:JSTOR
67:is a
187:ISBN
166:2021
144:: 5.
216:doi
259::
222:.
212:19
210:.
185:.
123:.
63:A
245:.
230:.
218::
195:.
168:.
54:)
50:(
36:.
Text is available under the Creative Commons Attribution-ShareAlike License. Additional terms may apply.