What Is a Branch Office?
A branch office is a location, other than the main office, where a business is conducted. Most branch offices consist of smaller divisions of different aspects of the company such as human resources, marketing, and accounting. A branch office will typically have a branch manager who will report directly to, and answer to, a management member at the main office.
How a Branch Office Works
Branch offices are useful in that they allow many of the client-specific administrative considerations to be conducted closest to clients. For example, Starbucks has branch offices to better serve its retail stores' district managers in a more cost-effective manner. They can also cater to and be more informed about the needs of specific locations, rolling out location-specific items or adjusting staff.
- A branch office is a useful way for large companies to satisfy customer needs for face-to-face interaction.
- A branch office might consist of a single individual or it could be staffed, depending on the needs of the business.
- In densely-populated urban centers, it’s not uncommon to see several branches within proximity to one another.
- In more rural areas, it may make sense to operate fewer branches which are further apart.
There’s no universal model a branch office setup may take on, but many are located based on geographic need. Many customers may prefer a local representative they can call on rather readily and, in more populated urban centers, it’s not uncommon to see many branches within proximity to one another. This is most common when considering service-based entities such as chain restaurants, banks, and retailers. In rural areas with less dense populations, branch offices are likely to be scattered farther apart.
A branch office may include a single representative, or it could be staffed with many individuals based on business need. The term "pop-up" refers to the fact that the office or store has a very short-term duration. It can be there one week and gone the next. Halloween costume stores are an example.
The “pop-up” shop is a fairly common event for retail and other event-driven commerce opportunities. In the future, it’s not unthinkable that financial service providers will use a pop-up model to quickly deploy temporary branch locations to meet the needs of an on-demand marketplace.
Example of a Branch Office
Many retail investment companies use a hub and spoke method to serve their clients. The hub, or home office, serves the spokes (branch offices) by carrying out many of the administrative functions that are optimal for scaling operations.
An investment company’s home office will perform and make available to branch offices many services including portfolio management, security analysis, branding, legal, and a host of other services required to run a full-scale operation. For example, Edward Jones is an investment firm that is well-known for its many branch offices—more than 15,000 in the United States and Canada. It has a large home office and the branch offices are typically run by individual investment representatives.