Expansion options: multi-unit and third-party arrangements

Although some in the franchise community may use different nomenclature for these programs, the three most common forms of multi-unit and third-party franchising are area development, master franchise and development agent arrangements. There are other forms of multiple-unit franchising, certainly,...

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Bibliographic Details
Published in:Franchising World 2008-04, Vol.40 (4), p.16
Main Authors: Fitzgerald, John W, Schott, II, Max J
Format: Article
Language:English
Subjects:
Agreements
Analysis
Business planning
Business plans
Evaluation
Expansion
Franchisees
Franchises
Franchising
Growth
Royalties
Third party
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Summary:Although some in the franchise community may use different nomenclature for these programs, the three most common forms of multi-unit and third-party franchising are area development, master franchise and development agent arrangements. There are other forms of multiple-unit franchising, certainly, but most franchisors who have ventured into this manner of expansion have utilized one of these three structures. Under an area development program, the franchisee is generally referred to as an area developer and the agreement signed is an area development agreement. Under a master franchise program, the franchisee is generally referred to as a master franchisee and the agreement signed is a master franchise agreement. There typically is a development fee, a designated territory and a minimum development schedule. Under a development agent arrangement, the franchisee or licensee is generally referred to as a development agent and the agreement signed is a Development Agent Agreement. Typically, multi-unit franchises are more difficult to terminate than single-unit franchises.
ISSN:1041-7311