The 4 levels of franchising

Most of us only think of owning a single unit business. We would like you to push
your dreams even farther. In the franchise system, there are many levels of ownership.
Read about each to figure out where you would best be suited.

Single Unit Franchises – This is where most people start. It allows you to
understand the system before expanding. This usually includes and exclusive territory
to operate. You would initially be very involved in the day to day business of the
franchise. Typical liquid capital required starts between $25,000 – $60,000, but
could range as high as $200,000.

Multi-unit Franchises – You may be asked to start out as a multi-unit, or
grow into it. There usually is a reduced franchise fees for multi-units. The risk
is lower because the franchisee can take advantage of the economies-of-scale theory;
by spreading costs across multi-units, the locations may be more successful. A good
sign of the health of the franchise is if many of the franchisees are multi-unit
owners. There is unually no exclusive territory where each franchise is set up.
You wilt be less involved in the day to day unit operations, but will supervise
each unit. You will become a general manager as more units are involved. Typical
liquid capital required starts between $50,000 – $70,000. The rest of the investment
is usually financed when each unit is opened.

Area Development Franchises – The franchisee has an exclusive area and the
rights to open a certain number of franchises with in that area. There is usually
a schedule with an expected number of opens with-in and certain time period. The
territory is much larger than any of the above and could range from a small city
to parts or all of a larger city. You would be involved in the beginning stages
of opening the first location. Then you would need to look for locations and management
for the additional locations. Typical liquid capital required would range from $60,000
- $120,000. This would pay for all franchise fees, securing the area. You many need
additional start-up capital. You would be able to finance the rest of the start-up
costs for each franchise, as they open.

Master Franchises or Regional Developers – You would be given the rights
to a much larger area to develop. You will be able to open franchises at a much
lower rate. Usually a Master Franchisee will open one unit for income and training
purposes. You will then be able to sell unit franchises, multi-unit franchises and
area development franchises. You would then earn a portion of the franchise and
royalty fees of these franchises. Master Franchises are very lucrative, but not
readily available. The territory can range from a large metropolitan area to several
states, or county. A Master Franchisee will usually set up and operate on unit,
but them move to having other manage while the master focuses on selling and consulting
or coaching the new franchisees. Typical liquid capital can range from $100,000
to $250,000 to acquire the territory and to start the area. Financing will be secured
for the start-up of the unit franchise.

Information obtained from the FBA – for additional information go to
Easy Franchise Match

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Master Franchising – The Ultimate Business!

How to Use a Little-Known Business System as Your Best Vehicle for Business Success…
The Best Kept Secret in Business Today… For the Right Person!

Eight years ago we stumbled over a unique business system that has brought unbelievable
success to it’s owners. Although very rare, those that were using it were not only
experiencing a high success rate but also a very high level of earnings.

We found that there is very little detailed information about this type of business.
Out of tens of thousands of business books there has only been one book written
about this type of business, to our knowledge, and it is very hard to lay your hands
on. No accurate database exists, that we have been able to find, which list these
opportunities. This system is one of the best-kept secrets in business ownership
today. It allows the business owner to develop a large business within a relatively
short period time, yet has an extremely high success rate. Recent surveys show that
these owners experience yearly incomes of $150,000 to $1,000,000 or more a year.
They build an increased net worth or equity in these businesses of $500,000 to $10,000,000 or more, much quicker in comparison to other businesses.

What is this Concept?

Imagine coming up with the idea of a new franchise concept that explodes in your
area with dozens of new units opening up. Imagine having control of this concept
and receiving royalties and franchisee fees on a consistent basis. Imagine having
an idea like McDonald’s and having people line up at your door to buy your opportunity.
Imagine having access to the best business experts to help guide you in your new
venture to build your organization to last. This opportunity is extremely rare,
yet there are such businesses available if you know where to look. This unusual,
highly successful opportunity is called MASTER FRANCHISING. With
master franchising you get all of the benefits mentioned above but without the expense
of having to develop the concept from scratch. You get control of the successful
franchise system in a specific geographic area, a proven track record that works,
the brand name and even a partner in the form of a corporate office and other master
franchisees to give you valuable support, latest innovations and business expertise
when you need it.

As a master or regional franchisee your ways of generating income are expanded over
that of a normal franchise. With a normal franchise you are generally offering the
product of service directly to the end use customer such as in a retail store. With
a master franchise, you can generate income through your own stores, if you wish,
with a significantly reduced royalty and franchise fee. In addition you can generate
sales through:

  • Franchise Fees- When you sell a franchise, you receive a franchise
    fee. Most franchise fees are between $20,000 to $30,000 and in a typical master
    franchise program, you keep most of the fee!
  • Ongoing Royalties- This is the ultimate income source. Once you
    help set up the franchises, you receive royalty income or annuity type income for
    the rest of the life of those franchises. Imagine receiving 2% to 5% of your franchisee’s
    volume every month.
  • Products or additional services- Often products or additional services,
    needed by the franchisee’s outlet, can bring excellent additional income.
  • Real Estate- If real estate is involved with the franchisee’s location,
    often the master franchisee can become involved in the development of sites and
    receive other types of real estate related income.

A Very Prestigious Business

The prestige of owning a master franchise and controlling an entire area can give
you great satisfaction. Your main job will be to act as a business consultant to
your franchisees and help them succeed in their own business. You will be associated
with the elite brand name of the franchise as the main developer of an area even
though it will be your franchisees investing their money.

Improved Quality of Life

Master franchisees own and enjoy a quality of life business. Here are some key characteristics
about the typical master franchise:

  • Very few customers. Your customers are your franchisees. You help support
    a small number of franchisees who typically own several franchise units each.
  • Very few employees. Typically you will operate a master franchise by yourself
    and then expand to have an administrative assistant, a trainer or other support
    person and a franchise sales person. As your master franchise grows larger you may
    need to add more staff, perhaps a general manager to run the operation so you may
    back away almost completely, if desired. We have found that many master franchisees,
    after having worked for three to seven years, can semi-retire and live off of an
    extremely good income and spend one or two days a month in the office.
  • Very little office space. Many master franchises can be started out of a
    home office. Once you have enough franchises in place then you can expand to an
    outside office.
  • You build equity in the business at a much faster rate than a normal business.
    Once you sell a few franchises or open your own stores, you increase the value of
    your business significantly. Not only do you have an existing business with cash
    flow, you have additional franchise opportunities to sell which gives the master
    franchise a higher value. Typically a master franchise will make four to nine times
    the earnings rather than the typical 1.8 to 2.8 times the earnings of a normal business.
  • Low overhead. You don’t have to jump into the business with a large office,
    staff and other overhead expenses. You can expand as you go.
  • You have the option of setting up your own franchises at reduced rates. As
    you open your own outlets you create another asset of value. You now have your master
    franchise with a specific value and also your own franchise with its value. As the
    value of your franchise increases, it increases the value of your master franchise.
    They are separate assets that you may sell when you would like.
  • You own an exclusive territory. Only you and your designated franchisees
    will be allowed to develop franchises in your area.
  • More freedoms exist in a master franchise than a normal franchise. You help
    set the standards of the franchise in your area.
  • You stay up to date on the latest technology. Being part of a larger franchise
    system allows the best ideas to flow into the corporate office and then into the
    field. You’ll have your own research and development department built right in.
  • You don’t need experience in the specific industry. You will receive industry
    specific training and support from the corporate office in the beginning and ongoing.
  • It can be started part-time and then you may move to full-time as required by
    the business you bring on.
  • Best of all- it is a franchise! Franchises as a whole enjoy a 92% success
    rate. Master franchises typically have an even better success rate than the normal
    franchise. All you need to do is find the right master franchise for you. Mater
    Franchising or regional development franchises, as they are sometimes called, are
    the best-kept secret in business today… for the right person.

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