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  • Will You Add? - Mater Franchise Strategies and Transfer Issues; Case Study

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    y to set specific limitations and stipulations all the transfer. Later I decided to include these limitations and stipulations in the Master franchise agreement prior to assigning. Below is a copy of the clause in the contr
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    There are many ways to extend your brand-name in a franchise company. The goal is to do it is fast as possible while maintaining a strong franchise family. Often franchise systems will choose a Master franchise strategy, whereby they will sell their rights to others within a region to again sell franchises.

    This strategy works well for both parties and provides significant financial incentives to the Master franchise partner. However, once all the areas in territories are sold within the region of responsibility for the Master franchise agreement, then the Master franchise has less financial incentives and generally only receives a percentage of the royalties of the current franchisees. At this point often the Master franchise will wish to sell their rights back to the franchisor or to another entity.

    The first time I had to deal with such a situation I found it necessary to set specific limitations and stipulations all the transfer. Later I decided to include these limitations and stipulations in the Master franchise agreement prior to assigning. Below is a copy of the clause in the contra

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    hereby they will sell their rights to others within a region to again sell franchises.

    This strategy works well for both parties and provides significant financial incentives to the Master franchise partner. However, once all the areas in territories are sold within the region of responsibility for the Master franchise agreement, then the Master franchise has less financial incentives and generally only receives a percentage of the royalties of the current franchisees. At this point often the Master franchise will wish to sell their rights back to the franchisor or to another entity.

    The first time I had to deal with such a situation I found it necessary to set specific limitations and stipulations all the transfer. Later I decided to include these limitations and stipulations in the Master franchise agreement prior to assigning. Below is a copy of the clause in the contr

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    nce all the areas in territories are sold within the region of responsibility for the Master franchise agreement, then the Master franchise has less financial incentives and generally only receives a percentage of the royalties of the current franchisees. At this point often the Master franchise will wish to sell their rights back to the franchisor or to another entity.

    The first time I had to deal with such a situation I found it necessary to set specific limitations and stipulations all the transfer. Later I decided to include these limitations and stipulations in the Master franchise agreement prior to assigning. Below is a copy of the clause in the contr

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    es of the current franchisees. At this point often the Master franchise will wish to sell their rights back to the franchisor or to another entity.

    The first time I had to deal with such a situation I found it necessary to set specific limitations and stipulations all the transfer. Later I decided to include these limitations and stipulations in the Master franchise agreement prior to assigning. Below is a copy of the clause in the contr

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    y to set specific limitations and stipulations all the transfer. Later I decided to include these limitations and stipulations in the Master franchise agreement prior to assigning. Below is a copy of the clause in the contracts that I came up with;

    5.7 Transfer of Master Franchise

    Master Franchisee may not directly or indirectly sell, pledge, assign, transfer or convey any interest in the Master Franchise without the prior written consent of Franchisor. In connection with any sale, transfer or assignment of the Master Franchise, the following requirements for Master Franchisee (assignee) must be met to the full satisfaction of Franchisor as a condition to any transfer:

    (a) The assignee must, at the time of such assignment or transfer, be financially responsible and economically capable of performing Franchisor’s objectives in this Franchise Agreement and in Franchisor’s business development plan.

    (b) The assignee must expressly assume and agree to perform such obligations and sign a binding agreement with Franchisor.

    (c) The assignee must be trained and pass Franchisor’s speci

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