First Step In Talking International – Getting TheTerminology Right!!

Try this test next time you are talking to someone about international expansion. Get them to explain the difference between master franchising, area development and area representation. Often these concepts are used interchangeably in Australia, and in our experience few people really understand the differences. However, they are very different relationships with very different consequences.

Master franchising in an international context is different to the typical Australian relationship. Internationally it essentially means appointing a local party to be the franchisor in that market. The master franchisee will enter into any unit franchise agreements, or for that matter any relevant area development or area representation agreements, in that market. Hot spot issues in master franchising include IP ownership and enforcement, sub-franchising rules and systems compliance.