A Primer in Master Franchising
Master franchising is the best gig in franchising,” said Bill Redfern, founder and CEO of Global Franchise Opportunities out of Ft. Lauderdale, Florida. “They don’t have the responsibility of the franchisor, they’re able to represent, market and sell the unit franchisees … they don’t have the responsibility of developing that brand and training.”
I listened intently, as our conversation was my first in-depth look at master franchising in my two years here at Franchise Times. During my pre-talk preparations, I Googled “master franchising” and learned that it’s a franchising contract in which the master franchisor, who owns the brand name, hands over control of franchising in a given territory to a person or entity—essentially turning over the brand to a third party (or newly created middleman) to help smaller brands realize explosive growth in international markets.
While it was a more common practice in years past—as franchisors have sought ever-greater levels of control over their franchisees—Redfern’s business that he started in 2007 is now up to three brands operating in 19 countries. His brands include A Buyer’s Choice Home Inspections, iCare Intelligent Home Care Solutions and, the latest, iHandyMan.
Redfern loves the master franchising arrangement, and thoroughly brought me through the pros and cons of such an arrangement.
“There are positive and negatives,” he said of master franchising. “To me, it made sense even though it was watering down my earnings on a per franchise basis.”
Beyond earnings, other dilution through the creation of what’s essentially a middleman include things like marketing, commitment to fully building out a territory and small practices like customer service.
To avoid these potential hurdles, Redfern’s company works to keep in close touch with its master franchisees, and says his team is always seeking feedback and intelligence from afield to tweak its systems and maintain the brand integrity, even when it’s been exported to a foreign land by a new partner with a high degree of autonomy.
In the pro column for a small-but-growing company like Global Franchising Opportunities, large-scale master franchisees have the financial and infrastructure horsepower to add a significant number of units that tend to succeed given the partners’ local expertise and connections.
Of course, another factor is the amount of the time Redfern and his wife spend on planes traveling to distant countries, most recently India. They generally enjoy exploring new cultures, but the pre-planning that often includes immunization and reading up about new countries is a parallel to what his company is trying to achieve on a much larger scale.
“It leverages our abilities by using a lot of smart people,” he added. “It’s almost like having a board room full of highly experienced, highly paid executives that all have a vested interest.”