and working with the local government) are variations on a common theme of franchising.
Under a master franchisee agreement, a single coordinating entity is set up which then establishes subfranchisees in addition to any franchises it owns itself. The master franchisee assumes the liability, but also reaps the benefit from the association. Master franchisees typically establish one or two stores and ensure their success before expanding their operation. If the master franchisee is working with subfranchisees, this approach permits the master franchisee to develop successful procedures which can then be passed on; if the master franchisee intends to operate all stores directly, it expedites the expansion process. Master franchise arrangements are among the most popular form of international franchising ("What is Franchising?" 2001, p. 1). The differences between master and traditional franchising are detailed on page seven.
Under the joint venture, the franchising company works directly with local operators to develop operations. To some degree, the master franchisee arrangement is a special form of joint venture where the master franchisee is granted the right to subfranchise any, all or none of the operation. This is not true of joint ventures. In addition, the joint venture may involve multiple relationships between the franchising company and other organizations, whereas master franchisees are granted exclusive rights to a particular country or region (Tomzack, 1995, p. 73).
Licensing agreements permit specific entities to use a product, trademark or other trade asset in return for a royalty fee. The benefit to the franchisee in this ar
...