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Does a master franchise mean you have exclusive rights to a whole country?
A Master Franchise Agreement is an agreement in which a franchisor appoints a master franchisee in a territory and grants it the right to both operate and grant franchises within that territory. It is fairly common for this territory to be far reaching and will often constitute the whole of a foreign country. There is no legal requirement that an MFA should provide the master franchisee with an exclusive right to operate a franchise and appoint franchisees in its territory. The master franchisee’s needs should be balanced against the views of a franchisor, who will have serious reservations about granting exclusivity to develop a country’s market unless there are strict provisions in place requiring a minimum standard of performance in terms of development by the master franchisee. As a compromise, it is common for a franchisor to require specific development targets in exchange for granting exclusivity. However, if the master franchisee fails to meet the requisite development targets, rather than the franchisor simply terminating the MFA the master franchisee may lose its exclusivity.
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