A master franchise is a business opportunity with proven success in other territories (usually other countries), but one that has not undergone previous testing in the UK. As a master franchisee, you hold responsibility for bringing the system into the country and making it work. To be successful, it pays to measure the potential benefits against any risk incurred before making a commitment to invest.
As the owner of a master franchise, you run two separate businesses and must establish them both. The core business involves developing product sales in the new territory but, as a master franchisee, you also need an additional set of skills to sub-franchise the concept and to attract other investors into the enterprise.
Recent master franchises in the UK include flavourful fast food alternatives from Pure Health, a sizzling opportunity to run a restaurant for the Go-Grill brand and the chance to compete against High Street giants by investing into Jon Smith Subs.
In much the same way as you would start your own business from scratch with an idea that drives your passion, a master franchise should capture your imagination and be the right venture for you. The opportunity must also match your levels of experience and your mid-term business goals, and not exceed a comfortable level of investment.
If you only want to run your own business without having to manage sub-franchises, it’s a better idea to buy into a concept that allows you to do exactly that.
Don’t forget that you’ll need to research local, regional and nationwide demographics to see if the UK is primed for your product or service, and whether or not the public can afford it. Just because a concept works well in another country, doesn’t guarantee the success of the master franchise when it moves to the UK – even though the country currently has a massive annual turnover of some £15.1bn.
Never opt for the first opportunity you see. Look for the right master franchise with the right company, and one with the best levels of support to help you find your feet. Avoid entering into a contract with overseas franchisers who fail to provide sufficient information on the concept, that seem keen to corner you into making a commitment or who refuse to support you in developing new markets in UK territories.
Even when the correct opportunity presents itself, seek the correct legal representation and understand that striking a deal doesn’t necessarily happen overnight. Always be aware of initial investment, start-up fees and ongoing costs, and never commit to a master franchise unless it is personally, ethically and financially suited to your business goals and objectives.