Do You Have What It Takes To Be A Master Franchisee?

02/02/2018 08:00 | Start a business

Master franchise - what does it take to be one?

When a franchisor has perfected their franchise formula and crafted a popular and successful brand within their country, then they may consider expanding into overseas markets. But to do this, they need the support of a master franchisee.

A master franchise agreement provides exclusive rights to sub-franchise in a designated territory. As a master franchisee, youd be expected to develop a franchise infrastructure to enable the business to grow overseas efficiently. As many global franchise brands continue to expand their operations by bringing their businesses to the UK, you may have the characteristics necessary to be a successful master franchisee.

Here are just some of the roles youll be expected to play while managing profitable franchises on behalf of the master franchisor.

1. Investor

As well as being very driven and committed, its important that a master franchisee has money.

Running a global franchise has many rewards, but bringing an overseas brand to the UK and making it succeed is not cheap. Youll need to fund the establishment and operation of the franchise before sub-franchisees can invest in the opportunity, and developing the required infrastructure is likely to involve a significant investment.

2. Hiring manager

An essential part of the role is testing the master franchise model to see if it is feasible in the UK market. Once its been proven that the business can thrive, youll need to hire franchisees that can effectively own and operate franchise units.

Just as with any franchise, youll be looking to recruit franchisees that are dedicated, determined and committed to making their business a success. In effect, the franchisees that you recruit will be oblivious to the fact that theyre part of an international franchise. They will view you as the franchisor and will turn to you for training, advice and guidance.

The success of the franchise as a whole will depend on you selecting quality franchisees who are prepared to adhere to the franchise model to ensure brand consistency. Previous experience in the industry and business ownership is not necessary for a franchisee to be successful, but having passion and enthusiasm is a must.

3. Market expert

As master franchisee (especially at country level) youll copy what the franchisor does in their domestic market. The reason the franchisor has chosen the master franchise route to expand their business is to take advantage of the local market knowledge that a master franchisee can offer.

Youll be expected to have a thorough understanding of any legislation, demographics and recruitment processes that may impact the franchise. You'll need to consider everything that is specific to the UK that the franchisor may not have experienced in their country.

Whereas the franchisor is an expert on their business; you will hold all the knowledge relating to growing that business in the UK. Therefore, you are partners that will work together to make the global franchise successful in a new market.

4. Business developer

A master franchisor may have enjoyed running profitable franchises overseas, but making that same franchise a success in another country is something very different. This is where you come in. A global franchise rarely works in a new market with no adjustments.

This is why master franchisees can be more skilled at developing a franchise concept in their own country. You have a much more in-depth understanding of the social, technological and economic differences between countries. Not only do you have a greater awareness, but youll be close enough to the operation to see how the franchise is progressing.

For this reason, youll benefit from more flexibility regarding how the business is run, than a standard franchisee. Youll have permission to modify the brand to suit the local market which will mean the difference between success and failure.

5. Leader

As youll be responsible for managing a strong team of franchisees, youll require proven leadership skills. The franchisor is effectively putting their brand and reputation in your hands, so theyll expect you to provide guidance and direction consistent with their expectations.

6. Trainer

The reason that many entrepreneurs choose to invest in a franchise above starting their own business is the training and coaching that's on offer. They get to be the boss without having to start a business from scratch. This also applies to a master franchise.

You must be able to develop and deliver the initial and ongoing training thats needed to teach the sub-franchisees how to be successful and run profitable franchises. As well as being a competent trainer, you also need to be approachable and available to provide coaching and to mentor when necessary.

Mistakes to avoid as a master franchisee

Master franchise opportunities should only be considered by experienced, and brave, franchisees. Its true that the role can have many benefits, but can also be tough and fraught with risks of failure.

A common mistake that master franchisees make is choosing the wrong opportunity from the beginning one that just isnt right for the UK market. When considering master franchise opportunities, you need to be cautious and prepared to wait for the right company to come along. Dont be afraid to end conversations with a franchisor if they dont provide you with enough information, applies pressure on you, or is not prepared to enter into a joint commitment to develop the new market with you.

You'll only risk investing in the wrong opportunity if you haven't performed adequate research. Even if the franchisor has completed market research to determine if the product or service will work in a different country, you still need to verify their findings with your due diligence. Prepare a business plan, which details the franchise costs versus turnover projections. Consider if factors such as the cost of property or petrol in the UK has any implications for the forecasted figures.

As well as market and financial research, make sure that you consult franchising professionals that can advise you on the right opportunity for you. Starting a master franchise is a huge decision and one that merits significant time and effort to be invested; before any money is.

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