What Is Area Development?
The term is used interchangeably with Master Franchise. An area developer agrees with the franchisor to open a set number of stores within a certain time frame in an agreed upon territory. Many of the same obligations, costs, shared responsibilities,shared benefits and compensation apply in both the area development franchise and the master franchise. Area development may be a commitment for fewer stores like 10-25 whereas a master franchise is typically a much larger number of stores(say, the entire state of Texas). The preferred model used by American franchisors to expand internationally, is through the sale of master franchise rights to entrepreneurs, and business investment groups abroad who wish to invest and develop the franchise brand throughout an entire country or large region of a foreign country. Domestically, the franchisor, for legal reason and to have more control over the brand will choose which option to use. With a master franchise the Franchisor gives up more control of the brand, whereas with an area development franchise the Franchisor retains more control over the brand and maintains a tighter hold over the area developer.
- The initial investment in an area development is likely to be less than a master franchise because it is determined by the number of stores the developer is committing to open, the regions demographics and population.
- The Area Developer risk can potentially be less with the commitment to open fewer stores. In addition, the opportunity for success is increased by managing the expansion of a proven, well established, well recognized, already successful franchise brand.
- Area Development Franchising is not a new fad. It’s been around for decades. It is a very well received business system that has enabled many investors grow significant businesses.
- An Area Developer can enjoy tremendous income and build significant wealth.Once the business it’s up and running, it can give owners the “lifestyle”they have always dreamed of affording them the luxury of time freedom and the opportunity to travel and do the things they’ve always wanted to do without restriction or limitations.
- It can be a great concept for downsized or retired Executives and seasoned Entrepreneurs to build a TEAM and use their talents to grow a local or regional network of “franchise d store” versus working hands-on in a single unit franchised store.
Opportunity knocks…we are here to help you!!
Business Broker World’s franchise experts have extensive knowledge and experience in franchising. We represent a number of well know franchise companies offering area development opportunities and we would be delighted to consult with you at no charge in exploring the most ideal match for you.