How Do Master Franchise Owners Get Paid?
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.
The master is not an employee of the franchise company so there is no salary or other fixed income. They are paid strictly as they produce revenue for the main company.
The main difference between being an individual franchisee and a master franchisee is in defining who your customer is. For the franchisee, the customer is the consumer that buys the product or service from the business.
For the master, the customer is the individual franchisee. The master spends his or her time focused on creating success for the individual franchisees so the business can grow through their increased volumes.
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Jeff Elgin has almost 20 years of experience franchising, both as a franchisee and a senior franchise company executive. He's currently the CEO of FranChoice Inc., a company that provides free consulting to consumers looking for a franchise that best meets their needs.