3 Benefits of Area Development Deals for Your Franchise Business
Franchise growth will remain a top priority for brands year after year, but strategies vary among franchisors. Although there are several ways to ignite expansion, a well-planned area development program has the potential to propel large-scale growth throughout a sustained period of time.
Rather than signing one unit or two-unit deals, a traditional area development program involves awarding large territories for individual franchisees to open multiple locations within the regions they are granted rights to develop.
A little more than a year ago, after several months of planning our comprehensive area development go-to market strategy, Pearle Vision introduced the program to our franchise system as well as our new franchisee prospects. We implemented a more traditional program, the type that awards franchisees the opportunity to own several locations within the region they obtain the rights to develop. As we ignite expansion through carefully selected strategic growth initiatives, we are encouraged by the initial success and positive response to our area development program. Now, we are expanding on the program, as it has become one of our most important vehicles for growth.
Similar to Pearle Vision, as your brand continues to evolve, here are three notable benefits you may also find from incorporating an area development program into your franchise growth strategy.
1. Unified Operations
In business, it’s imperative to have consistency across all aspects of operations. Though, in franchising, uniformity often becomes more difficult to control as more independent business owners are added to the mix. An area development plan can facilitate operational consistency by offering franchisors a smoother training process and ensuring there is a well-structured business plan put in place across a particular region. By working with a single operator or operator team as an area developer, your franchise can better maintain an operational consistency in high-quality customer experience at the local level, which can have a positive effect on the brand’s reputation as a whole.
Our area development program was designed to be an enticing “win-win” for the area developer and the brand. In exchange for a per-unit development fee, area developers receive limited exclusive rights to their territory and a reduced royalty fee, which provides the potential for a strong return on their investment. We are able to offer flexible development plans of five to 20-units. Having enticing incentives helps franchisors better attract developers who can grow a single region and enhance operational consistency.
2. Qualified Franchise Partners to Depend On
In order to maintain a strong culture across the franchise system, franchisors only seek individuals that fit their brand’s criteria. If your company has unique requirements for prospective partners, such as industry certifications or notable net worth, your franchise may have a smaller pool of qualified candidates. Thus, if you’re signing a skilled franchisee that fits your criteria and has an eagerness to grow the brand, your system can benefit from offering the individual an area development deal to open multiple locations across a larger territory.
Recognizing the benefits of reserving large geographic territories through our area development program, two of our seasoned franchisees were early adopters who now own large territories in the Phoenix and Tampa markets. As an area developer, they have an opportunity to maintain a growth schedule and reach their entrepreneurial ambitions.
3. Attainable Growth Projections
Once you’ve secured a dependable area developer to grow a particular region, your team will spend less time vetting through additional prospective franchise partners for that area. With talented area developers in place, franchisor teams can focus on developing additional new territories and dedicate resources to other needs within the company. In turn, the franchise will likely have less time between location openings in the area developer’s region and you’ll be able be to establish a routine and solid relationship with the franchisee. Plus, when only one franchisee is involved in the development schedule, the owner will often choose to work with the same set of local vendors throughout the build-out process, from site selection to opening day. Ideally, if a lesser number of third parties are added into the mix, the projected growth plan stays on course. As your area developer reaches the fourth or fifth location, the procedure becomes simpler for everyone involved.
Our strategy to award large development territories to skilled franchisees has provided steady, predictable expansion in communities through our key growth markets. In just over a year, our area developers in Tampa and Phoenix are already benefiting from the support structures, decreased royalties and growth schedules as they continue to open additional units in their region.
As you strategize your own development plans, I encourage you to further contemplate area development programs to drive your franchise’s growth for years to come.
About the Author
Alex Wilkes has been General Manager for Pearle Vision since March 2016, and recently guided the company through the launch of the brand’s area development program, which has already produced growth results in the Tampa and Phoenix markets. Established as one of Pearle Vision’s key pillars for growth, the benefits to entrepreneurs of the area development program include limited exclusive rights to their territory and a reduced royalty fee.
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