There are elements to the equation that don't make sense to me. If you're enjoying some level of success, but not making any money, exclusively in the microcosm of your hometown, then what is drawing A&R's attention your way? If they don't have faith that your sound will sell records, then there must be something about your image that's drawing them to you, but then why would your music be suffering a secluded existence if your image is drawing industry scouts to your shows?
Second, it's really not very coercive to suggest before signing the deal memo that the band's sound might have to be changed, or streamlined. Usually that comes long after lawyers have met and a contract has been negotiated. It's part of the grooming process that the A&R rep takes on after you've been signed and are working on your first album/single. The record company would most likely hire a producer that will work with the band and A&R rep (who's basically the record company's liaison in the whole mix) to mold the sound to something more accessible to a wider audience.
The point being that it's almost never the stereotypical scenario of the devil wanting you to knowingly sell your soul for fame and wealth, just sign on the dotted line. If that were the case, nobody would get signed, but the industry is a lot more clever than that.
But if I have to answer the question, I say I'd tell them to **** off, because where there's one talent scout there's usually at least one or two more on the way, and if I've already managed to get their attention, then I must be doing something very right.
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