Fact Sheet:
Master Franchising
What is Master Franchising?
Often called Regional
Franchises, a Master Franchise is a special type of franchise agreement that
gives you the exclusive right to sell or open a given number of franchises in a
large geographical area. It is common for Master Franchises to encompass an area
containing millions of people. In these
regions, you control where all franchise locations will be and how many you
will build. The investment in this type of franchise may be large, but the rewards
can far exceed those of any other franchise opportunity.
This is a low-overhead
business requiring few if any employees in the beginning. With work, the territory can be methodically built
into a business worth millions of dollars. William Bruce offers only a few
personally investigated and highly screened Master Franchise opportunities. He would welcome the opportunity to assist
you in reviewing the specific opportunities currently
available.
The Ultimate Business
This system is one of the
least known business ownership opportunities available today. The Master Franchise model allows the business
owner to develop a large business operation within a relatively short period of
time. Owners with the necessary capital and management talent can experience
significant growth and value appreciation.
Why is Master Franchising
Attractive?
As an entrepreneur, imagine
controlling a new franchise concept that explodes in your area with dozens of new
units opening up. Imagine receiving
royalties and franchise fees from this operation on a consistent basis. Imagine having access to the best business
experts to guide you in your new venture of building a system that has staying
power. This opportunity is rare, yet there are such businesses available to
those who will invest time to investigate the field.
With Master Franchising you
get all the benefits mentioned above but without the expense of having to
develop the concept from scratch. You get control of a successful franchise
system with a proven track record. You
can control the growth of this business in your own specific geographic area.
You inherit a brand name and even a partner in the form of the corporate
office. You also get the support of other Master Franchisees who can give you
valuable assistance, the latest innovations and business expertise when you
need it.
Increased Revenue
Potential
As a Master Franchisee, your
methods of generating income are expanded over that of a normal franchise. With
a normal franchise, you are generally only offering the product or service
directly to the end-use customer such as in a retail outlet. With a Master Franchise,
you enjoy several very important advantages:
- When you sell a franchise to a buyer in your
area, you receive a portion of that franchise fee as your royalty. You can
keep up to half of the net franchisee fee.
- You have the option to open your own additional franchise
locations at a significantly reduced franchise fee.
- You earn on-going monthly royalties from the
services performed or products sold in your area. This is the ultimate
income source. Once you help set up the franchisee, you receive royalty
income or annuity type income for the rest of the life of that franchise.
Imagine receiving 2% to 4% of your franchisee's volume every month for
many years.
- If real estate is involved with the franchisee's
location, often the master can become involved in development of sites and
receive other types of real estate related income. This type of income is
optional for the Master Franchisee.
A Prestigious Business
The prestige of owning a
Master Franchise and controlling an entire area can offer you great
satisfaction. Your main job will be to act as a business consultant to your
franchisees and help them succeed in their own business. You will be associated
with the elite brand name of the franchise as the main developer of an area.
You don't need industry experience because you'll receive initial training and
then on-going support from the corporate office.
Improved Quality of Life
Master Franchisees own and
enjoy a quality-of-life business. Here are some key characteristics of the
typical Master Franchise:
ü Very few customers: Your customers are your
franchisees. You help support a small number of franchisees who typically own
several franchise units each.
ü Very few employees: Typically you will operate a
Master Franchise by yourself and then expand to have an administrative
assistant, a trainer or other support person and a franchise sales person. As
you grow larger, you add more of these positions to your staff and perhaps a
general manager to run the whole operation as you back away to the degree that
you desire. We have found that many Master Franchisees, after having worked for
five to seven years, can retire and live off of an extremely good income and
spend only several days a month in the office.
ü Very little office space: Many Master franchises can
get started out of a home office. Once you have enough franchisees in place
then you can expand to an outside office.
ü You can build equity in the business at a much faster
rate than a normal business. 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, but you have additional franchise opportunities
to sell, which gives the Master franchise a higher value. Instead of the typical 2 to 3 times multiple
of earnings for most business appraisals, you could average a valuation of between
4 to 6 times earnings with a Master Franchise.
ü You have the option of setting up your own franchises
at reduced rates: As you open your own outlets you create another asset of value.
You now have your Master Franchise with a specific value and also your own
franchise locations with its separate value. As the value of your franchise
increases, it increases the value of your Master Franchise. They are separate
assets you can sell when and if you wish.
ü You own an exclusive territory: Only you and your
designated franchisees will be allowed to develop franchises in your territory.
ü More freedoms exist in a Master Franchise than a
normal franchise: You help set the standards of the franchise in your area.
ü You stay up-to-date on the latest technology: Being
part of a larger franchise system allows the best ideas to flow into the
corporate office and then into the field. You'll have your own research and
development department built right in.
ü You don't need experience in the specific industry:
You will receive industry specific training and support from the corporate office.
ü And best of all, it is a franchise. Franchises, on
average, have a 92% success rate, according to the Sourcebook of Franchise
Opportunities. Master Franchises (often referred to as regional development
franchises) typically have an even higher success rate than the normal
franchise. All you need to do is find the right Master Franchise for you.
Skills That Will Help You
as a Master Franchisee
Management
or sales experience. Real life
experience running a business or managing a business for someone else is very
helpful but not essential. There are successful Master Franchisees who are
engineers, hair stylists, or homemakers.
Good people
skills. You'll be dealing with
your franchisees and will need to treat them like customers, which they are.
The ability
and desire to follow a proven system. The franchise system offered is a system for success when followed.
Don't buy a franchise unless you believe you can follow their system. With
Master Franchising, however, the system is a little more flexible at your level
because you help set the standards for your particular area.
Financially
qualified. Franchise fees for a
Master franchise will typically range from $150,000 to $500,000 to purchase an
exclusive area. In addition, you will need operating capital to support your
operation until you can begin to make money. You will also need to allocate
funds to advertise for franchisees. Typical operating capital will be from
$25,000 to $200,000 depending on how large your setup is. Keep in mind,
however, that you can begin with fairly low overhead, perhaps running the
business out of your home until you are ready for a larger office.
Why is Franchising So
Powerful?
Franchising as a whole has a
92% success rate for business owners, according to the Sourcebook of Franchise
Opportunities. For franchisees who own multiple units, the rate increases to
97%. Increased market share equals increased profits and franchising is the
best way to gain market share. Right now, retail franchise businesses represent
only 8.3% of the businesses on the street. However, the sales from those
franchises represent 40.9% of the total retail sales in the United States.
Franchising is arguably the best vehicle for capturing market share. One of the
best ways to increase profit is to increase market share. The typical
franchise, when compared to an unaffiliated business, is more profitable.
As a result of their
extensive surveys, the International Franchise Association tells us that:
Ø 93% of franchisees say that a franchise gives them an
advantage
Ø 88% recommend a franchise over a non-franchise
business
Ø 83% are happy with their franchise
Ø The average yearly net income for a single franchise
location is $91,630
William Bruce has personally investigated
many but selected only a few Master Franchise opportunities to offer to clients. The opportunities have been highly
screened. Criterion for selection
includes a solid, non gimmicky concept, a multi-year track record of success
and earnings that are fully documented in disclosures properly filed with the
federal government.
As one example of the
opportunities uncovered, investigated and now recommended is a retail store
that has earned a net profit of over $300,000 for several years in a row. This flagship store is 30 years old and is now
franchising. The Master Franchises investment
for this opportunity averages $426,000 and gives the Master Franchisee the
opportunity to open multiple stores in a large territory.
If you think Master
Franchising might be right for you, please contact William Bruce to take the
next step in your investigation of the opportunity.
William Bruce
Accredited Business Intermediary
(251) 990-5910
Franchising is the single most successful marketing
strategy ever."
- John
Naisbitt, Author, Megatrends