A few weeks ago, The Times published their 2009 Rich List. Via the interactive search feature, uncovered that 7 families on the list made their fortune through franchising.
Most of them gained entry by becoming a master franchisee. This involves the franchisor granting exclusive rights to offer and sell franchises within a particular territory using the franchisor's marks and system. This is what the Herbert family (worth £145million) did when they launched the KFC franchise in Ireland. Same for the Halpern family (worth £48million) who launched the Domino's Pizza franchisee in the UK & Ireland.
Even though the initial franchise fees are higher, a master franchise license can lead to greater growth than a single unit franchise. Particularly as the master franchisee keeps a good portion of the initial fees and royalties that the individual franchisees pay over time. To earn these fees, the master franchisee will most likely be responsible for providing a certain level of ongoing support (training, recruitment, marketing, operations, etc.) services to the franchisees within the designated territory. In addition, depending upon the agreement, the master franchisee may be required to open a certain number of units in a specific time frame or schedule, and may also be required to open and operate one or several units of their own.
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