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The parties involvedSub-franchisee
A partner who receives rights from the master franchisee rather than directly from the original brand owner.
Where this sits
A franchise system involves several distinct roles. Naming each role precisely avoids misunderstandings about rights and obligations in the agreement.
In practice
This section summarises United States federal regulation (16 CFR Part 436) as published by the Federal Trade Commission. Rules change and differ by country — check the source before acting. For reference only; not legal advice.
A sub-franchisee's contract is with the master franchisee, not with the brand owner — and that single fact shapes the whole risk profile. Support, supply and standards all arrive through an intermediary that is itself operating under a fixed-term agreement.
The question to settle before signing is what happens to your outlet if the master's rights end. Some systems provide for the brand owner to step in and adopt the sub-franchise agreements; others do not. Under US federal law the master is treated as a franchisor toward you (16 CFR 436.1(k)), which sets the disclosure duty — but it does not, by itself, guarantee continuity.
Source: 16 CFR § 436.1(k) — Definitions · Reviewed: 2026-09-02