We’ve covered what it means to be a master franchisee as well as the basics of the master franchisee contract in detail before, but as a quick reminder, a master franchisee is someone who signs a contract with a franchisor and purchases the right to open several franchise units in a defined territory over a designated period of time. Most often, this type of agreement comes during international expansion, but it’s not uncommon in domestic territory where a franchise is looking to rapidly expand into a particular region.
Of course, there are substantial financial implications that come with investing in a franchise – something that is only magnified when it comes to owning multiple units, as a master franchisee does. That’s why it’s important to understand the costs and financial benchmarks needed in order to become a franchisee.
But with those basics out of the way, you’re probably wondering what the process of actually becoming a master franchisee entails. While it will vary from business to business, here’s a general outline of what you should expect.
Fill Out an ApplicationYou’ll be contacted by the franchisor and they will send a Franchise Disclosure Document to review. Sometimes you’re sent other paperwork to complete, including financial documents verifying your net worth and your available liquid capital.
Initial Interview and ConferenceThe franchisor reviews the documents and speaks with the potential franchisee to see if he or she is a good fit. The interview likely ranges from your personality to your business experience and background to situational questions regarding how you’d run the business. It’s essentially a job interview, but one in which if you get the job you’ll be leading the opening of several new franchise units and eventually running them.
More PaperworkYou’ll receive things like a market survey to determine the fit of your location and whether it makes sense to open franchise units in the selected territory, and a Letter of Intent (LOI) which signifies a mutual desire to continue the due diligence process and holds a selected market for a designated period of time.
Discovery DayMany franchises have some type of “Discovery Day” process that essentially is a multi-day visit to franchise headquarters. The visit usually includes more meetings and interviews with executives, as well as a chance to meet with and speak to fellow franchisees in the company. It might even include a visit to an actual franchise unit for a “day in the life” type of visit, as well as several other potential presentations.
Final NegotiationsThis process often includes finalizing financial matters – everything from franchise fees the master franchisee will charge new franchisees in their territory to the (potentially discounted) rate they’ll be paying for the right to open multiple locations themselves – selecting a specific territory and defining the limits within which another franchise can’t be opened, and setting the timeline the franchisor wants to be followed in terms of how often a new franchise unit is opened.
If you’re interested in opening a Senior Helpers franchise, contact us today to speak with a representative.