Different types of Franchising
There are a number of different types of franchisees – you may come across reference to single unit franchisees, multi-franchisees or master franchisees. What is the difference between them and what do these terms mean?
Single Unit Franchisee
This is as simple as it sounds – it refers to a franchisee whom operates a single franchised business.
Multi Unit Franchisee
Sometimes franchisees own more than one franchise. This may occur when a franchisee successfully establishes and operates a single store and goes on to buy additional stores. These additional stores can be operated more profitably because of the franchisee’s experience and also because of the economies of scale available to the franchisee.
This franchisee might operate one or two franchise businesses but is primarily responsible for developing a particular area, either by recruiting franchisees or establishing a minimum number of franchised businesses in the area.
The master franchisee is primarily responsible for recruiting and managing unit franchisees within a designated area. They may operate a franchised business themselves within that area, but do not always do so. The primary role of the master franchisee is to act as a “mini franchisor” within their designated area – recruiting, training and managing the unit franchisees that operate in their territory.