What is a master licence?

A master licence (or franchise) is usually given for a larger area, whole region or country. A master franchisee will have the right to open its own outlets and to subfranchise to individual franchisees (sub-franchisees).  The emphasis will be on sub-franchising and the master franchisee will be expected to establish its own outlets to pilot test in the target territory so as to have examples to demonstrate successful operations to prospective sub-franchisees.  The master franchisee will be required to provide the financial resources to establish and exploit the system in the target country or region. Whatever financial resources are needed to establish the system and operate it in that country will have to be found by the master franchisee. The sub-franchisees will provide the financial resources for the operation of the outlets that they operate.    The master franchisee is responsible for the recruitment of staff for the pilot operations, as well as for the establishment of the infrastructure of the master franchisee’s own business organisation. The fee income generated by sub-franchisees is divided between franchisor and master franchisee.