How an Area Representative Can Be the “Sweet Spot” in Franchising
Last month I spoke at Office Pride’s annual convention. It’s always a pleasure working with the folks at Office Pride; they’ve created a great franchise company that continues to grow.
Something we discussed heavily at the convention was the importance of their area representatives – especially in terms of development. These individuals are a key part of the Office Pride structure, as they represent and support the best interests of everyone involved in the organization. From individual unit owners to the corporate system, these professionals have become an integral part of Office Pride’s growth and profitability.
The Role of an Area Representative
Area representatives, also known in the industry as area developers and area franchisees, purchase a franchise area to develop and support. We call this the “sweet spot” in franchising, because it’s essentially a lower-risk and point of leverage for investment: the area representatives don’t have the legal fees, contract enforcement, registrations or collections efforts of the Franchisor; nor are they responsible for the financial responsibility and ownership efforts associated with opening and running a unit as the Franchisee.
Instead, a good area representative represents both the Franchisee and Franchisor to help strengthen the brand and multiply growth opportunities faster than either would be able to realistically achieve on their own. A few advantages that (better) area representatives bring to the table include:
- A solid understanding of the local market - they know how to get things done locally and typically focus on one geographical area.
- A network that can help, including relationships with local landlords, professionals, media outlets and advertisers.
- An ability to help franchisees in ways that a franchisor can’t afford to do in terms of time and focus. Rather than waiting days or a week for corporate to arrive, they are close and can provide quick support.
- Helping to promote the brand and facilitate the sales process for prospective franchisees.
In return for this assistance, as well as the on-site training, real estate work and other support and service functions they provide, area reps receive a portion of each store’s fees as compensation. For the franchisees, this fee is usually nothing more than the standard unit fees, so there is no real additional cost to them. Yet they benefit from the tremendous growth opportunities the area representatives provide.
In a later post, we’ll dive deeper into the role of the Area Developer, as well as their key role in the sales and development process.
