Master Franchising
A master franchising is an indirect international franchising system . It is a three-tier system which includes the owner of the franchising concept (the brand), the so-called master franchisor , the master franchisee and the sub-franchisee . In this system, the master franchisee is franchisee and franchisor at the same time; he is given the responsibility of a franchising system for a large region, usually a particular nation . The master franchisee often also aligns the concept with the local culture before passing the concept on to local sub-franchisees.
process
The expanding company contractually sells its concept to the master franchisee, who in turn issues franchise licenses to sub-franchisees. The master franchisee has the task of setting up an administrative company, its own training and acquisition concept. In addition, the concept of national culture and national law will be adapted.
Advantages for the master franchisor
A master franchise represents an expansion option for a company that requires comparatively low investments , since the master franchisor does not have to set up its own business abroad. The master franchisee assumes most of the financial outlay, as well as the risk and most of the work. The master franchisee can better adapt the concept to the national market because he is more familiar with the national culture, national tax and business law.
Disadvantages for the master franchisor
Due to the low effort of the master franchisor, the fees are low compared to conventional franchising, especially in the development phase. In addition, the master franchisor's ability to influence is limited, as he has no legal ties with the franchisee. If the cooperation with the master franchisee does not work as planned, this can have serious damage to the international image of the corporate brand .
literature
- Michael Kutschker, Stefan Schmid: 2006 Oldenbourg Wissenschaftsverlag “International Management” ISBN 3486580019
- Lirim Abdiju: 2007; Grin Verlag "Franchising as an internationalization method in retail" ISBN 3638727300
- Kevin B. Murphy, Robert Hayes: 2006; Atlantic Publishing Company "The Franchise Handbook" ISBN 0910627541
- Patrick J. Kaufmann, Rajiv P. Dant: 1995; Haworth Press "Franchising" ISBN 1560247290
Web links
- German Franchise Association
- Institute of Entrepreneurship - Independent, free advice on setting up a business with franchise in Germany