by Marvin Storm
| Area Representation
The 7 Best-Kept Secrets of Area Representation
“Sage ol’ pros” offer advice born of experience
In the 2008 U.S. Open Golf Tournament,
Tiger Woods won it all in a sudden death
playoff on the 91st hole.
This was the 14th major golf tournament Tiger had won in his career. Being in
playoff situations numerous times before
was a significant factor in his ability to
maintain his composure time and time
again when it looked as if he would not be
able to win. Yes, experience does matter.
Expansion through the area representative (AR) business model can be a game-changing strategy. Learning from franchise
pros and franchise companies that have
experience in deploying and managing this
business model enables emerging franchisors to capitalize on the “been there,
done that” experience to reduce risk and
cost in deploying an AR growth strategy.
In meeting and speaking with experienced franchise professionals over the years,
seven surefire tactics emerge from these
“sage ol’ pros.”
1) Building confidence. In professional
sports, winning teams develop an attitude
that they can prevail under any circumstances. Even though teams have talented
players in key positions, confidence is one
of the intangibles that enables players to
perform above their natural abilities.
A winning attitude in a franchise system
is best expressed through rapid growth. A
continuous flow of highly qualified franchisees creates energy that builds confidence
throughout a franchise system. This confidence is manifested in franchisees believing
they can trample the competition, overcome day-to-day challenges, and develop
the faith to try new things. Confidence creates a competitive advantage in the marketplace.
2) Growth. A properly structured and
executed AR growth strategy achieves rapid
growth, enabling a franchise company to
accomplish four critical things:
a) Funding—Initial area representative
fees provide franchisors with the ability to
execute an aggressive area representative and
franchisee recruiting strategy by providing
funds to make the brand visible to potential
franchise candidates.
b) Management—Initial area represen-
tative fees provide the financial flexibility to
recruit and assemble a high-quality manage-
ment team. Getting the right people on the
bus is one of the most important elements
for the long-term success of a franchise sys-
tem. Too often franchise companies have to
recruit second- and third-tier personnel
because that is all they can afford.
c) Support—Initial area representative
fees provide franchisors with the ability to
properly support area reps, who in turn
support their franchisees. Quality franchise
support at all levels drives revenue and roy-
alty growth, putting the franchisor in a
profitable operational mode so they are not
dependent on initial franchisee fees to sur-
vive. Profitability becomes the cornerstone
to financial stability, enabling franchisors to
continually evolve their franchise concept to
stay ahead of the competition.
d) Differentiation—When performing
due diligence, qualified fran-
chise candidates normally
investigate several different
franchise companies within the
same category. A rapidly grow-
ing system produces an energy
and excitement that often are
the key intangibles that make
the difference in which con-
cept candidates join.
3) Proximity of field support. The level and proximity
of field support provided by
qualified, well-capitalized area
representatives is far superior
to a centrally based, moderately experienced support team
that visits franchisees once
every blue moon. Locally based support by
area reps with a 3- to 4-visit per year
■ Tidbit
Saladworks igned on i open 30 ne Florida in 4i’ first area rep n 2008 to w stores in years.
“Confidence is one
of the intangibles
that enables players
to perform above
their natural
abilities.”
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