What Is A Master Franchisee?

A master franchisee usually works directly with the franchiser, develops the sales territory and recruits other franchisees. There  is a useful article on this topic.

A TRUE Master Franchisee buys a large area/territory. Typically this is determined by demographics and that varies based on the type of franchise involved.
The Master Franchisee then becomes THE franchisor for that area or territory. The Master's duty is to develop franchisees. They are not openings tores for themselves like an Area Developer, but they (the Master Franchisee) are selling franchise locations. So they are taking on the duties of a franchisor in many ways. They recruit franchisees, often they conduct or are integral to the training, assist with site locations, leases, etc. The things the franchisor would normally do is now handled partially by the Master Franchisor. The benefit of being a Master Franchisor is that part of the agreement offers the Master Franchisee a split or both the royalties and the franchise fee paid. This creates on going income and is the motivation for the Master Franchisee to build strong and successful franchisees in their network.
Hope that helps.