Master Franchise Agreement India

Master Franchise Agreement India

What is a Master Franchise Agreement India?  

The Master Franchise Agreement India (MFA) is a type of franchise agreement that grants the Master Franchisee the freedom to own and manage multiple businesses (referred to as units). Also, it gives the freedom to sub-franchise to open units to other independent companies. This is all well within a predetermined timeframe and geographical location.

Benefits of Master Franchising in India

Adopting a master franchising model has a variety of significant benefits, some of which are below.

  • Expansion & Growth – Particularly in areas where the franchisor has no presence, master franchising can be a great method to extend and expand an existing network.
  • More Focused attention on Territories – The master franchisee has local expertise or understanding of that territory if a sub-franchisor is there for a specific region.
  • Increase in Profits – Master franchising gives franchisors the opportunity to generate additional money. Despite declines in other sources of income, master franchise fees have the potential to bring the franchisor large sums of additional income.

Contents of Master Franchise Agreement India 

Master Franchise Agreement India

Below are the contents while drafting a Master Franchise Agreement. 

  • Introduction – The goal of an introduction is to present information on major problems in a way that appropriately reflects the parties’ objectives when they enter into the agreement. Also it identifies the key components of it.
  • Granting of Rights – The agreement’s common goal will typically be to advance the Franchise System in a particular geographic area.
  • Identification of Geographical Territories – It is important to specify the Master Franchisee’s allotted geographic territory. Depending on the well-stated objectives, the parties may decide to increase or decrease the territory.
  • Exclusivity in the territory rights – In exchange for their efforts in the growth of the franchise business, master franchisees will desire exclusivity for the area.
  • Possible Development Schedule – It will often include a development timetable. This is with a list of the franchise units that will launch in the designated territory.
  • Fee Structure – Two different types of franchise fees a Master Franchisee pays the Franchisor are normally in this agreement. The first is the up-front cost for the granted rights. The second is an ongoing franchise charge for the use of the franchise system and continuous support provided by the franchisor.
  • SubFranchisee Agreements – They are to employ the franchisor’s standard Sub-Franchise Agreement and to make sure that it complies with applicable local (mandatory) laws. Also, they may are to create a sample Sub-Franchise Agreement as long as it incorporates certain sections that the Franchisor deems obligatory.
  • Advertisements – The Master Franchisee is to employ the franchisor’s standard Sub-Franchise Agreement and to make sure that it complies with applicable local (mandatory) laws.
  • Contract Termination – Aside from a clause that states the MFA will end automatically when the agreed-upon period expires. Therefore the MFA must include provisions for termination by either party.

Types of Master Franchise Agreements in India

There are a lot more formalities, and legalities while establishing a Master Franchise in India.  It does not only with regards to the master franchise but also franchisees in different geographic regions.

  • Master Franchise Agreement – It is usually for the franchisor to the franchisee who is looking at expanding the brand presence in the whole country. This includes large regions, considering different zones within the country, a city from a larger perspective. 
  • Single-Unit Franchise –This is when the franchisor gives the franchisee the right to open a single unit of their franchise. It is to understand the market dynamics and capabilities of the franchisee. 
  • Multi-Unit Franchise Agreement –In this type of agreement the franchisor gives the franchisee permission to open and operate more than one unit of the franchise business. Here, the franchisee is to develop a few pre-determined numbers of units to be set up. In case they fail the franchisor can opt for another franchisee. 
  • Area Development Franchise Agreement – This type of franchise is similar to a Multi-unit franchise. The only difference is the franchisor grants an exclusive right to develop franchisees in that location. No other franchisee can set up a franchise there. 

Sparkleminds Assistance on Master Franchising in India

It is also important here to understand the many similarities between an area development franchise and a master franchise. One must seek expert advice in this domain for understanding the nuances of these terms and their applicability.

At Sparkleminds we also work out the most suitable Master Franchise Agreement in India. Furthermore, we have worked extensively in this domain. Also, we have a few good brands to expand and establish a master franchise in India. 

There are a few things that have to be looked into while preparing a master franchise in India. The brand has to decide the best location to set up a master franchise in India. Also, what are the rules and regulations is to be pre defined. 

To Sum up,

There are a lot of international brands expanding in India via Master Franchise. Thus, it is also important for local businesses to understand and also establish a set, pre-defined master franchise rules for their brands. 

With the team of experts at Sparkleminds, we will build the most feasible and perfectly applicable master franchise in India. We can help you with a few good Master franchise agreement samples in India. Also, we could be of your reference to draft your master franchise agreement formats on the same lines.