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Definition

Master franchise agreement

Master franchise agreement is similar to an area franchise agreement, but in addition to having the right to open and operate a specific number of locations in a particular area, also has the right to offer and sell the franchise to other people in its area.

For example, Bernie’s Coffee & Tea is a coffee restaurant franchise. The company sells master franchise agreements that provide a master franchisee the right to open a certain number of Bernie’s Coffee Tea outlets in a defined geographic area. After its own outlets have been opened, the master franchisee can then sell the rights to open additional Barnie’s Coffee & Tea locations in the same are to other individuals.

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