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A master franchise is a franchise relationship in which the owner of the franchise brand (the master franchisor) grants to another party the right to recruit new franchisees in a specific area. In exchange, the other party typically pays some price as well as agreeing to take on some or all of the responsibility to train and support new ...
The word franchise is of Anglo-French derivation—from franc, meaning 'free'—and is used both as a noun and as a (transitive) verb. [2] For the franchisor, use of a franchise system is an alternative business growth strategy, compared to expansion through corporate owned outlets or "chain stores". Adopting a franchise system business growth ...
The American Association of Franchisees and Dealers (AAFD) [2] came into existence because United States laws which purport to regulate franchising effectively legalize abusive franchising practices, rather than restrict franchise fraud. As long as the franchisor discloses the details of its practices, the unethical practices are enforceable.
A franchise agreement is a legal, binding contract between a franchisor and franchisee. In the United States franchise agreements are enforced at the State level. Prior to a franchisee signing a contract, the US Federal Trade Commission regulates information disclosures under the authority of The Franchise Rule . [ 1 ]
The franchise rule requires franchisors to make material disclosures in five categories: the nature of the franchisor and the franchise system; the franchisor's financial viability; the costs involved in purchasing and operating a franchised outlet; the terms and conditions that govern the franchise relationship
Master franchise: Vinci Partners. Burger King in Guarujá, Brazil. Burger King entered the Brazilian market in 2004, eventually operating and franchising 108 locations in the country by 2011. [112] [113] In June of that year, Burger King entered into a new master franchise agreement with Brazilian venture capital firm Vinci Partners. The ...
Arcos Dorados Holdings (English: Golden Arches Holdings) is the master franchise of the fast food restaurant chain McDonald's in 20 countries and territories across Latin America and the Caribbean.
In 1989, Jim's Group switched to a franchise model. [3] In 2009, there was a major disruption from the franchisees when fees were raised [11] and Jim Penman was almost voted out. In 2010, master franchisors held a "referendum" asking for Penman to stand down because of concerns with his leadership style, breaches of contract, and steep fee hikes.