When a franchise expands into a new territory, a franchisee may be awarded as an Area Developer. This means that the franchisee has exclusive rights to an area but is usually only entitled to open one franchise unit. From there, the Area Developer then recruits other franchisees to open in adjacent areas and in most cases will receive certain perks from the franchisor.
These may include reduced or mitigated royalties and fees, or a commission. It’s important to note that an Area Developer is an intermediary between new franchisees and the franchisor and cannot sell franchises. The Master Franchisee on the other hand, has the capacity to sell franchises on behalf of the franchisor in a new territory.