Master Franchise Agreements: What to Know Before Signing the Dotted Line
Hey fellow entrepreneurs! Are you looking to expand your franchise business and take it to the next level? Or are you looking to get into franchising for the first time in a big way? You should consider becoming a master franchisee. It’s like being a boss of bosses!
Here’s the deal: a master franchisee takes on the role of a franchisor within a designated territory. You’ll be responsible for recruiting, training, and supporting single-unit franchisees, and overseeing their operations. It’s a bigger enterprise, which means bigger growth opportunities for you.
With Stratus Building Solutions, you can be the boss and run your own franchise. We have 70 master franchisees already in our company who support a whopping 3,000+ single-unit franchisees who perform the commercial cleaning work. Impressive, right? Let’s explain what it means to be a franchise boss.
Key Components of Master Franchise Agreements
Now, before you get started, be sure you understand the key components of a master franchise agreement. Lucky for you, Stratus includes a sample agreement in their franchise disclosure document (FDD) to review before you sign on the dotted line. Here’s what you can expect to find in our master franchise agreement:
Territory Allocation
The franchise agreement sets out the license, designated territory, and office location requirements. The designated territory is the region where you are the boss of the bosses! You recruit sub-franchisees (unit franchisees) who perform the commercial cleaning work.
Terms and Renewals
In our franchise agreement, we include the term and renewal of your master franchise contract, as well as guidance on preparing the sub-franchisee agreements.
You have to sign a franchise agreement with your unit franchisees indicating the assistance and support you will provide to them. This includes identifying cleaning contracts and providing billing and collection on their behalf. You are also responsible for preparing your own franchise disclosure document and ensuring the franchise offering is registered with applicable state agencies (if that has not already been done.)
It sounds like a lot of paperwork, but don’t worry! There are lots of people at our head office to help you with this. Even though you’re a master boss, we’re still with you every step of the way.
Fees and Reporting Requirements
The master franchise agreement indicates the fees, payments, and reports you are required to submit to the franchisor. It also indicates the fees, payments, and reports that your unit franchisees are required to submit to you. Yes, as a master franchisee, you get a chunk of the royalties just like the franchisor, plus you get a portion of the franchisee fee for every sub-franchisee you bring on board. We like to share the wealth at Stratus!
Master Franchisee Responsibilities
It would be nice to live in a world with no responsibilities, but alas, we all have them! Let’s take a sneak peek at your master franchisee responsibilities:
- Manage an exclusive territory. It’s your turf to grow.
- Handle billing, invoicing, getting contracts, and collecting payments for your sub-franchisees. You’ll get the hang of it in no time with our awesome software.
- Marketing and advertising obligations. Stratus doesn’t currently require this (yay!) but other master franchise agreements might.
- Brand standards management. We have a pile of fun at Stratus but we also have a way of doing things and you have to teach your sub-franchisees about that. We’ll train you on brand standards so you can train them. The franchise disclosure document that contains the master franchise agreement sample will also list the table of contents for the brand manual.
Additional Items
Other common elements of a master franchise agreement might include things like audits, confidential information, insurance, and indemnification. We’re upfront here at Stratus but you should still consult a knowledgeable third-party franchise advisor to make sure you understand everything before you sign the agreement.
Stratus Building Solutions is Owned by Master Franchisees!
But wait, there’s more! Did you know that Stratus Building Solutions is owned by master franchisees? That’s right! Three master franchisees bought the company in 2015 and since then, the growth has been incredible. In fact, in 2023, Stratus was ranked the fastest-growing franchise by Entrepreneur Magazine!
If you’re ready to take on the challenge of being a master franchisee, Stratus is one of the best options out there with an estimated initial investment of $225,000-$350,000 depending on the territory size. In terms of master franchise investments, the package we offer is one of the best you will find. Plus, commercial cleaning is a $61B industry, so the potential for growth is huge.
So, what are you waiting for? Request more information from Stratus Building Solutions by completing a simple online form. As a company owned by master franchisees, they know the potential of this business and are excited to explore this opportunity with you. Let’s talk!