What is the difference between a master franchisee and an area developer?
In a master franchise relationship, the franchisor grants the right to an indigenous business entity or individual (master franchisee) who must understand and develop the business concept in the host country or region, establish a number of successful and profitable operating units and grant franchise rights directly to indigenous franchisees through sub-franchising. Whilst in an area development arrangement, the Area Developer enters into an agreement whereby the rights are obtained to develop a minimum number of stores or units within a specified territory within a specific time limit. The area development arrangement is a kind of multi-unit franchise, whereby the area developer has no resale rights, but rather shoulders the responsibility for meeting a mandatory development schedule for their given region.
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