Single unit franchisee
A single-unit franchisee acquires the right to own and operate one franchise unit.
This license grants the franchisee the right to open a minimum of three (3) franchise units in a specified territory. There is a production schedule in which the franchisee will open a predetermined number of franchises during a certain period. The Area Developer franchisee has a protected, exclusive territory in which no other franchisees will be allowed to open a franchise.
The Area Developer acquires a minimum of three locations at signing. The Area Developer pays a progressively lower franchise fee for all units after the first one.
MASTER FRANCHISEE (REGIONAL DEVELOPER)
A Master Franchisee, also called a Regional Developer, has the rights to a larger area than that of an Area Developer. The Master Franchisee, in addition to opening franchises at a much reduced franchise fee and paying only 1⁄2 of the standard royalty fee, can also sell unit franchises, multi-unit franchises and area development franchises and make a nice return on each sale.
The Master Franchisee receives 1⁄2 of the royalties paid by each franchisee. Master Franchisee receives 100% of franchise fee collected from every franchise signed in their territory.
The Master Franchisee becomes somewhat of a sub-franchisor for the area. The Master Franchisee will be required to open and operate one unit (pilot location) for income and to use as a training center. Master Franchises are rare. Most franchisors do not offer them. However, when they are available they usually sell quickly. The income generated from a Master Franchise can be very lucrative.
The initial investment is low compared to the type of value you can build in the Master Franchise area. The flexibility for the franchisee is also greatest at this level.