National Account Ownership: A Game-Changing Trend for Franchisees

By George Knauf

In the evolving world of franchising, new opportunities continue to arise that offer innovative ways for franchise owners to scale their businesses and expand revenue streams beyond the traditional model. One of the most exciting developments in the franchise industry is the emergence of National Account Ownership, a powerful strategy that allows franchisees to participate in lucrative national projects, regardless of their local territorial boundaries.

Historically, the world of franchising has been tightly confined by geographic territories. Franchisees would typically focus on servicing their local market, and while national accounts existed, they were often managed solely by the franchisor or the corporate entity. If a local franchisee played a role in bringing in a national client, their contribution might be acknowledged with a small share of the revenue—a token "thank you" for their efforts. However, the franchisee's involvement in managing or servicing that national client would be limited.

Today, franchisors in sectors like commercial services are recognizing the immense potential of their franchisees. These business owners are often highly skilled, experienced, and driven individuals capable of managing more than just local operations. As a result, a new model is emerging where franchisees are given the opportunity to develop, own, and service national accounts, creating a win-win for both franchisor and franchisee.

This innovative approach is proving to be a game changer, offering franchisees the chance to scale their business beyond their local territory, increase profitability, and play a strategic role in the national growth of the brand. In this article, we'll explore the concept of National Account Ownership, its benefits, and how franchisees can set up their business to both service their local territory and manage these larger, national projects that are farmed out to other franchisees across the country.

The Traditional Franchise Model: Limited by Territory

Before diving into the specifics of National Account Ownership, it's important to understand how traditional franchise models work. In most franchises, when a business owner purchases a franchise, they are assigned an exclusive territory—a specific geographic area in which they can operate. This territory might be based on population size, market potential, or other factors, and it effectively creates a boundary for where the franchisee can do business.

This territory system offers benefits such as exclusivity and the right to grow the brand within a defined market. However, it also comes with limitations. For instance, if a franchisee has the potential to attract a major national client, their ability to service that account would be restricted to their local market. In the past, the franchisor would likely take over the management of that account on a national scale, leaving the local franchisee out of the loop or providing them with only a small commission as a reward.

The Emergence of National Account Ownership

The shift towards National Account Ownership represents a significant change in this traditional model. Franchisors in sectors such as commercial services, facilities management, and B2B service industries are recognizing the valuable contributions that their franchisees can make, not just locally but on a national scale.

With National Account Ownership, franchisors are now partnering with select local multi-unit franchisees to help them develop, own, and service national accounts. These franchisees are no longer confined by the borders of their local territory. Instead, they have the opportunity to manage large national projects that span multiple territories, with the actual servicing of the accounts being handled by other franchisees across the country.

This model allows for a much more collaborative and scalable approach to doing business. Franchisees who demonstrate talent in securing national clients or managing large-scale operations are being recognized and given a stake in the broader national strategy. This recognition often comes in the form of fractional ownership in national accounts, which allows franchisees to earn revenue from projects that extend far beyond their local market.

How National Account Ownership Works

National Account Ownership is a relatively simple concept, but its execution requires careful planning and coordination between the franchisor and franchisees. Here's how it typically works:

1. Franchisee Identifies a National Opportunity: A franchisee with strong business development skills might identify a potential national client, such as a large corporation with locations across multiple states. This client could require services such as cleaning, facilities management, or other commercial services that the franchise brand offers.
2. Collaboration with Franchisor: Instead of the franchisee handing off the opportunity to the franchisor and receiving only a small commission, the franchisor partners with the franchisee to develop the account. The franchisee takes on a fractional ownership role, meaning they have a stake in the success of the national account.
3. Account Management: The franchisee who brought in the national account assumes responsibility for managing the relationship with the client. They become the National Account Manager, overseeing all aspects of the service agreement, from pricing and contracts to quality assurance and customer satisfaction.
4. Servicing the Account: While the National Account Manager (the original franchisee) manages the account, the actual service delivery is farmed out to franchisees in other territories where the client has locations. For example, if the national client has offices in multiple cities, franchisees in those cities will provide the local services.
5. Revenue Sharing: The National Account Manager earns a percentage of the revenue from the entire national project, not just the portion that takes place within their local territory. This creates a new income stream for the franchisee and allows them to scale their business without significant additional investment.
6. Franchisee Collaboration: Franchisees across the country who are servicing the national account benefit from receiving new business, while the National Account Manager benefits from the overall revenue generated by the project.

Why National Account Ownership is a Game Changer

National Account Ownership offers numerous benefits for both franchisees and franchisors. Here are some of the key reasons why this model is proving to be a game changer for the franchise industry:

1. Scalability: One of the biggest advantages of National Account Ownership is that it allows franchisees to scale their business beyond the limits of their local territory. By taking on the role of National Account Manager, franchisees can grow their revenue by managing large national clients, without needing to invest in additional physical locations or staff.
2. Increased Revenue Streams: Franchisees who participate in National Account Ownership can earn revenue from projects that take place outside their local market. This creates a new income stream that complements their existing local business.
3. Recognition of Talent: In the past, franchisees who brought in national clients were often undercompensated for their efforts. National Account Ownership recognizes the talent and skill of these franchisees and rewards them with fractional ownership in the national project. This not only boosts franchisee morale but also encourages franchisees to actively pursue national opportunities.
4. Collaboration and Partnership: National Account Ownership fosters a sense of collaboration and partnership between franchisees. By working together to service national clients, franchisees across the country benefit from increased business, while the National Account Manager benefits from the overall revenue. This collaborative model strengthens the franchise system as a whole.
5. Low Investment, High Reward: One of the most appealing aspects of National Account Ownership is that it allows franchisees to scale their business with minimal additional investment. Unlike traditional expansion models, which might require opening new locations or hiring more staff, National Account Ownership focuses on leveraging the existing franchise network to service national clients. This makes it a low-risk, high-reward opportunity for franchisees.

Setting Up Your Business for National Account Ownership

For franchisees interested in participating in National Account Ownership, there are several steps they can take to set up their business for success. Here are some key strategies to consider:

1. Develop Strong Business Development Skills: National Account Ownership starts with identifying opportunities. Franchisees should focus on developing strong business development skills, such as networking, sales, and relationship building, to identify potential national clients.
2. Build a Reputation for Excellence: Franchisors are more likely to partner with franchisees who have a track record of success. Franchisees who consistently deliver high-quality service in their local market are more likely to be considered for National Account Ownership roles.
3. Foster Relationships with the Franchisor: National Account Ownership requires close collaboration with the franchisor. Franchisees should work to build strong relationships with their franchisor, demonstrating their ability to manage large projects and contribute to the overall growth of the brand.
4. Invest in Technology and Systems: Managing a national account requires robust systems for tracking contracts, service delivery, and customer satisfaction. Franchisees should invest in the necessary technology and infrastructure to efficiently manage national projects.
5. Be Open to Collaboration: National Account Ownership is built on collaboration. Franchisees should be open to working with other franchisees across the country, recognizing that the success of the national project depends on the collective efforts of the entire franchise network.

Conclusion

National Account Ownership is a revolutionary trend in the franchise industry, offering franchisees the opportunity to scale their business beyond local territory boundaries and increase their revenue streams. By taking on the role of National Account Manager, franchisees can manage large national projects and earn a share of the revenue generated by franchisees across the country. This collaborative model not only benefits individual franchisees but also strengthens the franchise system as a whole.

For franchisees looking to grow their business in new and innovative ways, National Account Ownership offers a low-investment, high-reward opportunity that leverages the power of the entire franchise network. As this trend continues to gain momentum, it's clear that National Account Ownership represents the future of franchising—one where franchisees are empowered to play a strategic role in the national growth of the brand.

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