branch1 is one location with one server; users can chat between each other
user1@branch1.com
user2@branch1.com
user3@branch1.com
user4@branch1.com
.....
branch2 is another location with one server; users can chat between each other
user1@branch2.com
user2@branch2.com
user3@branch2.com
user4@branch2.com
.....
when user1@branch1.com chats with user2@branch1.com their chat is Client-Server-Client
when user1@branch1.com chats with user1@branch2.com their chat is Client-Server-Server-Client
Now with Jabber like with e-mail you can decide to have a server for each "branch"; the advantage is scalability and the fact that if an internet connection goes down, users of one server can still chat between each other.