Master Franchise Agreement
Master franchise Agreement is popular with service franchises. Service franchises are those which involve the franchisee selling services rather than goods. Service franchises are common in the home services, cleaning and courier industries. Often there will be no retail premises involved, with the franchisee operating from home. The use of a vehicle will be a critical element of the franchise.
A feature of service franchises is the high number of individual franchisees. To avoid creating a large head office bureaucracy master franchising can be used to delegate the responsibility of growing, developing and monitoring the network in a territory to a master franchisee.
The grant of a master franchise is very similar to the grant of a franchise. However, the terms of
the master franchise and the responsibilities of the master franchisee are different from those of a
franchisee. A franchisor must provide a master franchisee with a disclosure document, a cooling
off period and other arrangements applicable to franchisees under the Code.
The Master Franchise Agreement (MFA) is a type of franchise agreement that allows the Master Franchisee the right to own and operate more than one establishment (called unit), and the right to sub-franchise the right to open units to other independent businesses (called Franchisees), all during a specified time within a specific area.