The position that the majority of franchisors do not take seriously

“According to operating data from various retail organisations, a multi-store manager can influence performance by up to +/- 20%” – DMS Retail

“Despite this significant influence, the role of the area manager is often undervalued and inadequately addressed by franchisors.” This is according to FASA’s new service provider member, The Results Coach.

“The responsibilities of area managers have evolved significantly over the past two to three decades,” says Larry Hodes, consultant and facilitator at The Results Coach. “The modern-day area manager is no longer merely a watchdog for compliance but is expected to be a strategic contributor, actively involved in enhancing operational excellence during their store visits. While compliance remains a non-negotiable, the concept of “adding value” is paramount and is a responsibility that holds immense potential for positive change.”

Area managers, also known as operations managers, regional managers, or franchisee consultants, oversee clusters of stores generating turnovers ranging from R100 to R400 million annually. Surprisingly, these responsibilities mirror those of high-powered CEOs, yet the calibre of area managers often falls short due to inadequate hiring or training processes.

The role of the area manager is often underestimated and not taken seriously enough by franchisors. The area manager is a key enabler and a key driver for success for the franchise brand. “While working for a large food franchise group in South Africa, says Larry.

Hodes, “it always intrigued me as to why certain area managers were successful at achieving positive change within their stores and some failed miserably. It was also evident that often how a store or franchisee/manager performs was dependent on how competent the area manager was.”

How a region performs depends on how competent the Area Manager is

Consistency is paramount for any franchise brand. A key responsibility of area managers is to ensure uniformity across all stores, from service quality to product standards. Unfortunately, achieving this consistency often proves challenging due to various reasons.

Some common challenges to consistency:

Underestimation of the role: Many executives fail to grasp the critical importance of the area manager role.
Delegated strategic implementation: Executives often make strategic decisions and leave the execution, including meeting performance targets and changing franchisee/management behaviours, to the area manager; without providing the necessary training and tools.
Budget constraints and hiring inexperienced area managers: Some executives opt for inexperienced or incompetent area managers due to budget constraints, compromising overall performance.
Narrow definition of role: Some executives believe that the key role of an area manager is one of being a policeman and a box ticker, i.e. their only task is to focus on compliancy, tick the box and nothing else, leading to them undermining their potential for driving standards and achieving franchisee/manager buy-in.
Insufficient training: Research shows that area managers receive less training than store managers and staff, hindering their ability to excel in their role.
Overseeing too many stores: Managing an unrealistic number of stores impedes the area manager’s capacity to affect positive change. In some cases, they oversee 30 to 40 stores.
Failure to transition to strategic leadership and still operating as a store manager: Certain area managers are unable to make the transition from store manager to area manager, so they end up being “Super GMs”, trying to “Do everything within their stores”, resulting in ineffective leadership. This is a thinking job, not a doing job.

To enhance the performance of area managers and consequently, the entire franchise, a paradigm shift is required. Executives must recognize and address these challenges to empower area managers to bring about positive change, consistency and increased profits.

Key Responsibilities of Area Managers:

Protect the brand: an absolute key responsibility is compliance to franchise brand standards.
Positive change implementation: Area managers play a pivotal role in implementing head office initiatives and driving positive change
Leadership and guidance: Serving as brand ambassadors, area managers guide and coach franchisees, management and staff, fostering a positive work culture.
Strategic direction: Area managers must possess strategic thinking skills or at the very least; strategic tools which can assist and contribute to the growth and success of their respective regions.
Effective communication: Open and effective communication between executives, area managers and franchisees and management is essential for achieving consistency and success.

Next time your franchise experiences challenges such as inconsistent standards, declining profits, or poor buy-in, consider evaluating the effectiveness and competence of your area managers. They are the linchpin to achieving store consistency, increased revenue, franchisee buy-in and franchisee satisfaction.

Elevate your franchise success by unleashing the full potential of your area managers. By recognizing their pivotal role, addressing challenges and providing the necessary support, you can witness a positive transformation in store consistency, increased revenues and heightened franchisee satisfaction. The key to sustained success lies in empowering the often underestimated but indispensable area manager.

Larry Hodes

Larry Hodes, with his extensive experience in franchise management, offers a transformative programme called “The World’s Greatest Multistore Leadership Programme.” This program focuses on turning area managers into strategic contributors with all the tools and insights necessary to thrive in their crucial role, ensuring they go beyond being mere tick-box operators.

Embrace operational excellence and unlock the full potential of your franchise with empowered and strategic area managers. Contact Larry Hodes