Master franchises are mostly an unknown investment that allows you to build equity and cashflow simultaneously. Master Franchisees, sometimes called area developers, buy the rights to sell a franchise in a particular territory. The Master then starts selling unit franchises in the territory. The master typically receives a portion of the franchise fee for every unit that is sold, up to 50%. The master also typically collects some of the royalty that is paid out, again usually up to 50%. Royalties are usually based off of sales so the master creates a nice residual cashflow from the royalty sharing. Masters will also train and provide support to the unit franchise. Some franchises require that the master open a unit to show prospects but it just depends on the franchise. Quite a few franchises use master franchisees to grow their business in a relatively short period of time and to keep support local to the unit franchisees. They do typically require a large amount of cash down and a large net worth but there is a wide range out there available.
We have some Masters and Area developers available throughout the U.S. Let us know what questions you have about them. Check out some franchises at www.keystonecatalyst.com