Subfranchising

Learn the 4 main types of franchise arrangements: single unit, multi unit, area developer and master franchise. The franchising industry is very versatile, with multiple franchises, industry options and investment ranges.

Traditional or product-distribution franchising. Business-format franchising. Social franchising.

The master normally gets a cut of all the money that flows from the individual franchisees to the main franchise company -- most often around half. This could include initial franchise fees, ongoing royalty fees, training fees, real estate or build-out assistance fees.

Share. Sub-franchising is the term used to describe the relationship between a master franchisee and the unit franchisee in those systems that are the overseas operations of a franchisor that has decided to expand internationally.

A master franchise agreement is an agreement executed by and between a franchisor and a master franchisee, whereby the franchisor grants the master franchisee rights to the franchise and licence to: (i) exploit and use intellectual property rights, including without limitation, the trademarks, manuals and 'know-how' (

In master franchising, the franchisor sells the development rights of a particular area to a master franchisee who, in turn, sells individual franchisees within the territory.The master franchisee is responsible for attracting, screening, and signing all new franchisees within the territory.

There are two main types of franchising, known as Product Distribution Franchising (Traditional Franchising) and Business Format Franchising, which are conducted under a variety of franchise relationships.

Single Unit Franchise (or Direct Unit Franchise) is the most traditional and historically the most common form of franchising.The franchisees have to invest their own capital and apply their own management skills (generally hands-on).