Master Franchise Contract
Index of the contract
The Master Franchise Contract is a type of franchising contract whereby a company (the Franchisor) grants another (the Master Franchisee) the right to exploit and assign franchises on an exclusive basis, creating a franchise units network in a defined territory, usually in the country where the Master Franchisee has its headquarters. This type of contract is very well suited for the international expansion of a franchise business as the Master Franchisee is very knowledgeable of the market allocated to it and has contacts to develop a network of establishments.
There are three participants in this contract type: the Franchisor who owns the marks, the Know-How (Franchise Handbook) and the products; the Master Franchisee, which is going to develop the franchise business through searching for, selecting and controlling the sub-franchisees; and the sub-franchisees, who are the people who manage the points of sale. It is also common, however, for the Master, to manage certain establishments, particularly the first one which is created.
The Master Franchise Contract regulates the most important aspects of the relationship between the Franchisor and the Master Franchisee, such as exclusivity, the franchise network, the fees payable, the supply of products, the pricing policy or non-competition agreements. Annexes are also included with additional information on the Intellectual Property Rights (commercial names, marks), description of products and general conditions of sale.
The draft contract is designed for Master Franchises at international level (usually for a certain country, region or geographical area) and can be used for both product and service franchises.The language of this contract is English. It is also available in Spanish.