Franchisors should have the contractual right to prevent the master from entering into new contracts or taking on new obligations on behalf of the mark without the prior consent of the franchisor, as soon as he has received a termination. Each LIM is different. Each one begins and ends for different reasons and at different points in its development. Thus, the size, financial skills and experience of the franchisee (hereafter referred to as “masters”) and franchisors, the proximity between the two, the number of sub-reducers involved, the laws in force, etc., become influential on how the parties can and will end their relationship. Therefore, instead of looking at these variables, which often determine the outcome of the end of relationships, this article focuses on the common relationships and situations in which the parties find themselves. It is the franchisor who decides whether to offer master`s or surface development options. In both cases, the franchisee must open a site and operate it successfully before being allowed to develop others. Both also require that the applicant be financially protected, as this is a significant and long-term investment. The master franchisor follows in the footsteps of the franchisor and must assume all the obligations and responsibilities of the franchisor. This requires that it have the same infrastructure at headquarters, namely development, operations, marketing, training and accounting, all of which must be paid for. An AD does not have such a responsibility, but must have the means to finance the first unit and another that most likely takes place in the same year. NSW indicated that the definitions contained in the code of “franchise,” “franchise,” “franchise” and “master franchise” contained all references to the sub-franchise. However, the Tribunal found that these definitions did not indicate the right or power to grant sub-franchisers to franchisees, but merely indicated that all under-franchiseds should be covered by the code.
In addition, NSW`s AMF did not fit into the code`s definition as a “franchise contract” because it was not granted the “right to pass on the supply, supply or distribution of goods or services” but rather the right to “recruitment, training and follow-up” of franchisees. The most common use of master franchising is when brands wish to enter a new geographical area where they have no knowledge of the market or culture. Often the market is too far for the franchisor to administer itself, has different laws, I like customers and buying habits, has a different language, currency or time zone. In these cases, local know-how is essential and the franchisor is willing to give up a large part of its franchise rights and royalties to develop its brand internationally. Many franchisors use MMAs to enter the Canadian market, where geography is not that far away, but the customs and trade environment is very different and varies from province to province.