Restaurant Franchising, 3rd Edition

466 Restaurant Franchising

Master franchisees may open their own restaurant(s) or grant fran-

chises to others. They also collect fees and royalty payments, which in

turn they pay to the franchisor. Master franchisees perform most of the

functions that a franchisor normally does, for which they are paid part of

the collected fees or royalty fee, per the agreement. The agreement con-

tract between the franchisor and the master franchisee clearly describes

what is expected of each party and sets a specifi c period within which the

master franchisee must meet stated objectives. Master franchisees have

the responsibility not only to sign up subfranchisees ...