When I left my executive career to become a franchise consultant it was with the expectation that within a year or two I would know enough about the vast array of concepts that my ability to choose the best model for me would easily emerge.
Within three months of starting my practice, I discovered master franchise and regional development franchises. It happened when I was presenting a fast growing contempo spa concept to a client. He and his wife were very ambitious about creating wealth through franchise ownership and were considering doing this using the multiple unit development model. During this conversation we also explored their interest in becoming what is called a Regional Developer for this concept.
There are a few layers of franchising. At the top sits the creator of the concept, the Franchisor (ZOR). When the ZOR expands internationally they sometimes award Master Franchises for an entire country or a region of a country. This allows them to essentially delegate brand growth to a third party. In the U.S. about 5 to 10% of franchisors award Regional Development franchises. RD’s as they are called are a way to quickly capitalize a newer franchise while bringing on diverse business experiences that can help expand the concept more rapidly and/or thoroughly. RD regions typically can be acquired for $60k on up to $400k.
RD’s not only help to resell territories, but they then coach the franchisees (ZEES) using the established business model. Compensation comes in the form of shared franchise fees and shared royalties. It can be a wonderful way to develop residual revenue streams.
Successful RDs usually have a strong sales and marketing background along with solid leadership skills. RD franchisees often come from the executive ranks where they have already demonstrated solid business acumen, an ability to be decisive and understand that leading others to success is one of the best ways to create big success.
If you’re seeking to create wealth through franchise ownership, if you enjoy leadership and get excited about brand building, the RD model might be the perfect fit for you.