What is the difference between an Area Developer and a Master Franchisee?

While there are a number of similarities between the two franchise models they differ in a fundamental way.

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.

Tracy Lee Nicol
About the Author
Tracy-Lee Nicol is the managing editor of Franchise Zone Magazine and deputy editor of Entrepreneur Magazine. She studied her Masters degree in Art History and Visual Culture at Rhodes University and spent the next two years working and travelling in Asia. Her love of people, business and teaching is reflected in telling the stories of entrepreneurs, franchisees and franchisors, inspiring others to take the leap to being their own boss and bringing about positive change in South Africa.

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