When creating your franchise plan, one of the first things you'll need to do will be to choose one or more structures under which you'll offer franchises. The choice of franchise structure will impact a number of variables that will further define your franchise organization—targeted franchisee, support requirements, staffing, and cost structure -- so you shouldn't enter into it without some forethought and financial modeling.
Understand that when it comes to franchise structure, there's no standard naming convention. For instance, what we call an “area representative” structure is referred to in some organizations as an “area developer” strategy and in others as “master franchising.” Here's our shorthand definitions for quick reference:
Single-unit or individual franchising involves granting a single franchise to a franchisee for just one business operation. While the franchisor may choose to award more than one franchise to some of its franchisees, they're typically sold individually and not as part of a multi-unit territorial grant. Perhaps the most prominent example of a company that grew primarily through single-unit franchising is McDonald’s.
