Financial Post:

Master franchising is a common vehicle for Canadians to bring foreign-based franchise systems to Canada.

Under conventional direct, or unit, franchise agreements, the franchisor grants the rights to the franchisee to operate its branded business at one particular location, which territory may or may not be protected.

Under a master franchise agreement, the franchisee is granted a much broader territory — a city, a province or even the entire country. The “master franchisee” is typically given the right to sub-franchise the brand within its territory so that it is not responsible for operating every single location. Most franchisors use this method to expand their brand because they can locate one operator they really trust to be their brand ambassador, and deal entirely with that operator rather than a patchwork of franchisees.

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