What is a master franchise?
Last reviewed July 6, 2026
A master franchise is a two-level arrangement: the master franchisee buys the rights to a large region and may sub-license units to other franchisees within it, acting as a mini-franchisor — recruiting, training, and sharing in royalties. It is a development play that demands far more capital and management depth than unit ownership, and it is most common when brands expand into new countries or large regions.
The master franchisee's product is franchisee success, not customer service — a different business entirely from running units. Compare against the area developer model, where you open and operate the units yourself instead of sub-licensing.