aster licensees are key to the success of any international brand. The opportunity to be a master licensee of a forward thinking brand, being the leader with the ability to create a household name for the brand in your country, to coach and mentor franchisees is a thrilling and financially rewarding experience.
Currently, franchisors have the ability to teach franchisees how to excel in their business. However, teaching master licensees on how to become ‘franchisors’ takes a different set of skills and knowledge that the franchisor does not possess.
The scenario ends up looking like this: The master licensee launches operations of several company outlets to test the concept in their country. After positive results, the master licensee begins efforts at franchising and here is where the problems begin.
The master licensee is stuck and overwhelmed with the additional complexity of being a franchisor. They are not adequately equipped with the knowledge and experience of successful recruitment, training and support of franchisees. Plus the franchisor is ill prepared to mentor and guide a master licensee to perform the role of a franchisor effectively.
The end result is that you have two well-intentioned parties not fully happy with each other and neither happy with the results at hand. In a recent survey by Franchise Mind Corporation, a majority of Master Licensees said they were ‘not satisfied’ or ‘somewhat satisfied’ with the support received from the franchisor. In the same survey, franchisors said that the number of franchise units under their master licensees and the performance of these franchisees were ‘average’.