The Dangers of Treating District Managers as a Cost Center

Not long ago, I met a regional director. To improve his bottom line, he was considering cutting down district managers to a single individual to oversee 50 franchisees. My suggestion to him was not to bother managing the stores at all at that point.

When will retail networks understand that district management is not a support function, a mere cost center that should be reduced at all costs?

By cutting the number of district managers, we limit the ability of the franchisor to support, understand and solve the problems of franchisees before they become serious. It works well for 18 months, then the network begins to falter as dissatisfaction grows and the numbers drop.

Conversely, a well-run network means franchisees who succeed and who are happier. In other words: fewer exits and higher same-store sales.

But to achieve this, district managers must be able to take time to understand, listen and create relationships with each of their franchise partners. Have you ever tried to bond with 50 people at once?

In my opinion, embarking on a process of cost reduction through district management means aiming for short-term gain, even if it means long term pain. This is only “good” if you want to sell your network quickly, without qualms for the franchisees who have trusted you and have been engaged for several years.

What do you think ?

Julien Perret is the Founder and CEO of BCHEF and Original Burgers. This post was translated and posted here from an original post on LinkedIn, with his permission.

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