Franchisor can give a master franchise. There is a difference between franchise and master franchisor. Master franchisor is all about having that enthusiasm in the veins to run a business successfully, it’s about building the foundation of a business. A master franchise is a franchising contract in which the master franchisor (the owner of the brand name) hands over the control of the franchising activities in a specified territory to a person or entity, called the "master franchisee" while a franchise is a business system in which private entrepreneurs purchase the rights to open and run a location of a larger company.
A franchisor gives the master franchise which further has three choices to expand. These options include regular franchise, multi unit franchises and areas to develop. In regular franchise, franchisor gives the right to run the business at a particular location, multi unit franchises includes an entity to operate business at multiple locations and to develop the business across the country comes under areas to develop part. “There are many restaurants running successfully in Delhi which are single unit without being them franchise able. For us, to open and operate a restaurant is to ensure that the quality and standardisation needs to be maintained. And, to achieve this we actually spend couple of years with those restaurants and made them franchise able and now opening the restaurants across the country,” avers Sana Chopra, Executive Director at Carls Jr. Restaurants LLC. We have embassy restaurant at one place and now we are opening same embassy restaurants across the globe following the same model, she adds further.
Why should someone take a Master Franchise?
There are various reasons why someone should. When there’s a parent company who gives Master Franchise then they actually cyst the brand a lot of avenues. Everything is handed out by the Master Franchise on the platter. Here are few aspects.
Human Resource Deployment
Master Franchise actually assists the brand with the hierarchy i.e., how many people one needs, job description, et cetra. Also, one is able to hire his own people in Master Franchise instead of franchise where they are already bound to work with the provided corporate team whether they are compatible or not.
Operations & Supply Chains
Master Franchise also helps with operations and supply chains so that the brand has greater control over supply chains, inventory management, maintaining the stocks in the restaurants and warehouses, brand has greater access to be a part of the whole process. Brand is even flexible in choosing the hours of operation.
It is like a direct opportunity to get connected with the parent company and help them to establish what product to sell in a restaurant or a retail outlet. It is more than a plug in and plays process. It’s about involving in the whole process. “Carls Jr. Restaurant has done three years of extensive research with the brand before handling them the master franchise,” adds Sana.
Master Franchise is responsible to maintain the overall quality of each food item and process as auditing and training to staff over quality needs to be done by them only. Master Franchise has the control in its hand; they are actually able to control how a brand should establish in a country.
Marketing, Advertising & Communication
The time of an agreement signing the parent company tells Master Franchise that they need to allocate a certain percentage of pre opening budget and post opening revenue into marketing.
Master Franchise builds foundation for business and a brand needs to make most out of it.