Success in the Franchising in Greece (gr), Franchise

Outbound Activities | Master Franchise

Types of Master Franchise

a) Area Master Franchises
This is where an existing Greek Franchisor seeks a Franchisee who is able to take control of large areas of the country.Normally the Master/Area Franchisee will recruit and manage additional franchisees and will be involved in the overall development of the business in the area under his or her control.Whilst the overall price of the Master Franchise Opportunity is significantly higher than a normal franchise, the earning potential is also higher as the Master Franchisee will normally benefit from a proportion of the fees paid by other Franchisees in the area. The Master Franchisee will also be involved in Franchise recruitment and training.

b) Master Franchise - Outbound
This is where an existing Franchisor wishes to develop the Franchise Internationally and grants the right to a sub Franchisee to develop the area (the Master Franchisee) . The Master Franchisee is responsible for recruitment and development of the business in the chosen Country.
A Franchisor, seeking to expaned Internationally, will have a proven track record in his own country with detailed and successful methods. He will expect the Master Franchisee to maintain standards and run the franchised area in accordance with the terms set out in the manual.
The advantages of having a Master Franchisee for the Franchisor is that he gets local ownership, local market knowledge and an understanding of local regulations.

c) Master Franchise - Inbound
This is where a successful International Franchisor is targeting within a country as a potential area to develop a Master Franchise operation.
Anyone considering the purchase of a Master Franchise licence will need to convince themselves that the product or service provided by the Franchisor is viable in his country.
The Master Franchisee will work closely with the Franchisor to develop his particular market. A proportion of royalties will be paid to the Franchisor.

Master Franchise

With certain modifications, the master franchises use the procedures and methods of the franchise and they become the representatives of the franchisor when dealing with the other franchisees within their country. Within the framework of a master franchise agreement the strengths of a well-developed system and the deep knowledge of a certain area are combined together. The advantages of master franchising are particularly noticeable in the following areas:

Entering the market
The master franchisees dedicates some really valuable time and effort of collecting information on specific market conditions, laws, business practices and financing sources. As a result, the risk of making a wrong decision due to an insufficient information basis is reduced and the entry into the market is accelerated.

Entrepreneurial risks
The owners of a master franchise are responsible for building up their business. It is common that they contribute a considerable amount of money and take a great extent of entrepreneurial risks in order to establish and develop the franchise system in their areas. In return, master franchisees receive a share of the financial success of their franchisees who are found, selected, and being trained by them. It is only worth using this additional master franchising level, however, if the market chances are good and the profit margin large.

Amount of work required
As far as granting of single licences is concerned, franchisors must only deal with one partner in a certain territory. The training, experience and suitability of master franchisees determine to what extent the work load of franchisors can be reduced and how the system will develop within this territory. If the master franchisees have the advantage of experience by owning a pilot business, they can then carry out training and giving advice from the very beginning and only receive help from the systems head office when they have problems that are very difficult to solve.

Quality standards
If the abilities and commitment of the master franchisees correspond with those of the franchisors, then there is a good chance that the separate franchisees will also reach the required level of performance. Internationally successful franchise systems attach great importance to the supervision and upholding of mutual standards of quality. In order this to be achieved, master franchises adopt the reporting system.

Direct contact
With the agreement of master franchisees, franchisors also have direct contact with the separate franchisees. Such a contact is achieved through regular conferences as well as occasional visits to the businesses themselves. Such meetings, which emphasise the importance of the separate franchisees within the whole system, often creates a kind of family atmosphere. They produce a positive atmosphere and feeling of confidence which is characteristic of successful companies.

Sanctions
It is occasionally the case that master franchisees are unable to achieve the required quality standard within their areas despite comprehensive training and advice. Should this be the case, the franchisors are forced to end the cooperation as quickly as possible to prevent these problems having negative effects on other territories. Even if the terms of such a separation are carefully regulated in the franchise contract many problems can still occur. Thus franchisors can find themselves facing an insufficiently trained or even unmotivated network of franchisees who at best may have mixed feelings towards a change.