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Master Franchise /Area Representative Advantage
Q: What is an Area Representative or Master Franchisee?
A: A little known Secret in Franchising about making Money ...
Imagine sharing in the royalty income generated by all of the Subway Sandwiches' or Domino's Pizza's operating within your city. A Master Franchisee shares in the income generated from the units operating within his/her territory.
A Master Franchisee is someone in the unique position of owning the rights to sell business franchises in a given area. This territory can be a major metropolitan area, an entire city or in some cases the whole State. The Master Franchisee rarely works in the day-to-day operations of the unit; rather your job is primarily a business consultant to the franchisees.
How does this work?
A Master Franchisee buys the rights to market & sell franchises within a specific territory for a Franchised Company. Not every franchisor offers Master Franchising opportunities however; those that do are utilizing this strategy to encourage more rapid growth. This could mean huge profit opportunities for you.
Prestigious
In addition to selling franchises, the Master assumes the exciting role of business consultant to the franchisees to help them succeed. This is usually in the form of providing training, sales support and business development strategies. Most Master Franchisees find this to be the most satisfying part of the job.
Financial Freedoms
Unlike other business systems, Master Franchisees truly have the ability of turning their dreams of financial freedom into reality.
Here is a typical example:
You purchase a territory from an automotive franchisor or a computer franchisor for a certain amount of money (your investment). A typical territory can cost between $50,000 and $500,000.
Your agreement with the Franchisor may state that you will receive 50% of the franchise fee and 50% of the royalty income, for each unit sold or opened within your territory.
Let's assume that the franchise fee is $25,000 per unit and the royalty is 6%. That means that for each unit opened in your territory, you will receive $12,500 (50% of the $25,000 franchise fee).
Let's go one step further; assume that each unit opened will have a gross yearly sales volume of $1,000,000. Each unit is then required pay a royalty of 6% of their gross sales, equally $60,000 per year. You as the Master Franchisee would then receive 50% of this amount or $30,000 per unit, per year!
| One Unit Opened: | Your Income: |
| Initial Franchise Fee $25,000 | $12,500 initial fees you collect |
| $30,000 annual income to you | Annual Gross Sales $1,000,000 |
| | $42,500 |
| Ten Units Opened: | Your Income: |
| Initial Franchise Fee $25,000 X 10 | $125,000 in initial fees you collect |
| Annual Gross Sales $10,000,000 | $300,000 annual income to you |
| | $425,000 |
| Twenty Units Opened: | Your Income: |
| Initial Franchise Fee $25,000 X 20 | $250,000 in initial fees you collect |
| Annual Gross Sales $20,000,000 | $600,000 annual income to you |
| | $850,000 |
If 100 units open in your territory, your royalty income would be $3,000,000 per year. In addition to that, you would have made an income of $1,250,000 for opening 100 units because you received 50% of the franchise fee which is $12,500 (100 x $12,500 = $1,250,000)
The profit potential of owning a successful Master Franchise territory is huge.
Sounds Incredible but is it Real?
Some of the most recognizable names of Franchising have used this method to grow their business. Using this system Franchisors are able to have Area Representatives located throughout the Country all working together on opening units. Without this Area Representative/Master Franchising concept most companies would find it impossible to have national development team on staff.
To be able to grow more rapidly and expand their concept some Franchisors figured out that sharing a portion of the Franchise Fees & Royalties would entice high-quality Area Representatives to their brand. The big question is: in 1983 would you have invested in becoming an Area Representative within a new and unproven franchise system called; Mailbox etc. or Quiznos Subs before they became national brands?
Below is a list of a few Franchise systems that have used Master Franchising to help develop their brand.
| Dominos Pizza | Subway Sandwiches | AAMCO Transmissions |
| Mrs. Fields Cookies | Mail Boxes Etc. | PostNet |
| Curves | Realty Executives | Fantastic Sams Hair Cuts |
| Jani-King Cleaning | Molly Maid | Quiznos Subs |
| Century 21 Realty | and many many more.. | |
More than likely you recognize some of these brand names today. But would you have invested in a system called .Curves. in 1995? This was started by a Husband & Wife team with no franchising experience. Today Curves is one of the fastest growing franchise system on the planet, opening 900 units a year and $1 BILLION in annual revenue. Getting in on the ground floor is the key to becoming an Area Representative or Master Franchisee. After a system has started to mature and/or becomes a recognizable brand, the opportunities become either VERY expense or completely non-existent.
Want to learn more?
Because relatively few franchisors offer Master franchise opportunities, the ones that become available usually sell quickly. Contact us and see if there is a Master franchise in your future.
Additional Benefits of Becoming a Master Franchisee / Area Representative
As you have seen, the potential profits of purchasing the rights to be a Master Franchisee are enormous. Your business can grow quickly, along with your income and net worth. But there are other benefits as well.
The Satisfaction of Entrepreneurship
As a Franchisee you own your own business! A franchise is a proven entity that eliminates many of the risks associated with a fledgling business and positions you to grow. But as a Master Franchisee, you have influence over not only your business, but of the Franchisees you sell in your area. This is an incredibly empowering, satisfying position to be in.
Help Others Succeed
You will serve as a business consultant/coach to the Franchisees and use what you have learned to help them to succeed. Your main function will be to nurture the Franchisees and provide them with the guidance they need to succeed. You will receive extensive training and be in the enviable position of educating others. Many of your Franchisees could own several units themselves and rely on your expertise and guidance.
Low Overhead
Once you purchase your territory, you can work from your own unit or from your home office! There is no need to rent expensive office space or expensive equipment.
More positive benefits:
- Very Few Customers. Your customers are your Franchisees. You will help support a small number of Franchisees who run the daily operations of their own businesses.
- Very Few Employees. Typically, you will operate a Master franchise by yourself and then expand to add more staff. It is not unusual for Masters, after having worked for 3 to 7 years, to semi-retire and live off an extremely good income while spending only 1-2 days a month in the office.
- Very Little Office Space. Many Masters start with a home office before expanding to an outside office.
- Build Equity Faster. Once you sell a few franchises or open your own stores, you increase the value of your business significantly. Not only do you have an existing business with cash flow, you have additional franchise opportunities to sell.
- More Freedom. Unlike a normal franchise, a Master franchise allows you much more flexibility.
- No Experience Needed. You will receive industry specific training and ongoing support.
- Best of All... It's A Franchise! Franchises as a whole enjoy a 92% success rate and Master franchises experience even greater success.
Because of the high income potential, the initial investment is really quite low compared to the value that is likely to be built.
Could You Be A Master Franchisee / Area Representative?
If you feel that you meet the qualifications listed below contact us to take the next step.
The franchisor will usually grant a territory to someone or some group with the following qualifications:
- Management and/or sales experience. Real life experience running a business or managing a business for someone else is very helpful but not essential.
- Good people skills. You will be dealing directly with the Franchisees and will need to treat them like customers.
- The ability and desire to follow a proven system. The franchise system offered is a system for success when followed. It is not wise to buy a franchise unless you believe you can follow their system.
- Financially qualified. The fee to purchase the rights to a Master franchise territory can typically ranges from $50,000 to $500,000. On occasion you may need the capital required to open and operate at least one unit (showcase location) and support your operation until you can begin to make money.
Wealth Creation
According to many experts, a Master Franchise offers greater earning power than a normal franchise. While a normal franchise makes money operating units, a Master Franchisee generates income several ways. These include:
Operating Units. As a Master Franchisee, you can open your own units if desired. These units can be more profitable due to the reduced franchise fees and royalties.
Franchise Fees. When you sell a franchise, you receive a portion of the franchise fee. Most franchise fees run between $20,000 to $30,000 and in a typical Master franchise program, you keep up to half of this fee.
Royalties. You receive royalty income or annuity type income for the life of the franchises that operate in your territory.
Turnkey Unit Development. There may be opportunities to sell single or multiple franchise units and make a nice profit on the sale.
Real Estate. There may be additional income available from real estate interests.
The income available from a Master Franchise can be extremely lucrative.
More profitable and more successful
As a result of their extensive surveys, the International Franchise Association www.franchise.org/ tells us that:
- The typical franchise is more profitable and successful than an unaffiliated business.
- Franchising as a whole has a 92% success rate for business owners.
- For Franchisees who own multiple units, the rate goes up to 97%.
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Interactive Tutorial:
Click Here to view our eNotebook presentation on Master Franchising
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Who We Are Document:
Click Here to view our Who We Are document
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