5/14/2008

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Franchisors recognize the benefits of the potential for rapid expansion and reduced levels of operating expenses through area representation as area representatives take on certain obligations of the franchisor, and in turn, are compensated for doing so. This article covers an outline of the different type of area representation models, how they are typically executed, and the roles of standards of operating, compliance, and earnings claims in the process. What are the initial opening fees, how are royalties split, what does the development agreement look like? Who is responsible for site selection, collections, ongoing training, and support? What happens when area representatives exit the system? These questions, and many others, will be addressed throughout this article, which was presented at the 2008 Multi-Unit Franchising Conference, April 23, 2008.