Recent research from IWG shows that flexible office space is the leading option for franchise investment, eclipsing traditional industries including coffee shops and gyms.
In a poll of 501 business leaders interested in franchising1, more than half (56%) said they are considering becoming a flexible office (‘flexspace’) franchisee, or are actively looking to do so, in the next 18 months. Respondents said they were three times as likely to invest in a flexspace franchise compared with a hotel franchise (19%).
“Office space is one of the most compelling franchise opportunities on the market and IWG is the biggest name in the business, offering a support package which is second to none” says Pip Wilkins, CEO of the British Franchise Association.
Potential franchise partners looking to team up with IWG will quickly notice the global flexspace provider’s varied and distinct set of portfolio brands – from the widespread, traditional-feel Regus to the contemporary, lifestyle-influenced environments of Spaces. It’s the key benefit of partnering with the global flexspace provider; not only are you teaming up with a worldwide expert with 30 years’ experience, you also have the flexibility to provide a spectrum of different flexible workspaces and co-working environments, using the IWG platform.
Visionary investors spearhead the trend
It was exactly the IWG’s scale and heritage made it the ideal franchise partner for James Wright at the end of last year. Why now? Adoption of the ‘hub-and-spoke’ model, where businesses downsize central HQs and open up more regional bases nearer to employees’ homes, is driving a desire for more flexible workspaces throughout the UK and the rest of the world.
Wright says he’s noticed the acceleration of the rise in hybrid working, including by large enterprises such as NTT and Standard Chartered bank, and points to their groundbreaking deals with IWG as evidence of the shift. Made earlier this year, these partnerships will offer a combined workforce of almost half a million people access to IWG’s global network of flexspaces.
Demand for IWG workspaces in some commuter hotspots surged by as much as 175% during the pandemic. This move towards local working was behind James Wright and his business partner Jamie Graham’s decision to focus on opening centres across north-east London.
With no franchising experience, James Wright is on a new journey, excited about what lessons the opportunity will offer him. “Understanding the relationship between the parties is very different to what I’ve done before,” he says. “I’ve always been more prepared for joint-venture agreements, limited-partner agreements or asset-manager roles. This is very different. I think the relationship is much more supportive and synergetic than a lot of those other roles.”
While the franchise agreement is at the very early stages, he is optimistic about the future of the franchise, confident that IWG is the right partner to make their plans a success.
“IWG is the longest standing, best capitalised and most profitable of the large operators in this sector,” says Mr Wright. “So it is the right partner. The plan is to open those centres as quickly as we can, and seek out new opportunities thereafter. So that means either targeting new centres in the same areas, or looking more broadly into adjacent areas to expand the franchise.”
Security in uncertain times
Security is one of the top reasons given by investors opting for a flexspace franchise. Two thirds (66%) of those already interested in franchising believe that franchise businesses are a safer bet during tougher economic times, with the same percentage agreeing that franchising offers the added protection of working with trusted and established brands.
Meanwhile, flexspace franchisees are starting the year more cheerful than non-franchise investors: as a group they are almost three times as likely to feel positive about their business prospects for the next 18 months than those who aren’t interested in franchising (38% vs 14%).
What’s up in Poland?
“In Poland IWG offers over 30 serviced offices under the Regus and Spaces brands, from individual offices, which can be rented for almost any period of time from one month to two years, to conference rooms or co-working offices. We offer a membership package which allows you to use all IWG locations in the world – over 3,300 offices in 110 countries. The offer includes also virtual addresses,” says Michał Dorszewski, franchise director CEE at International Workspace Group. What's more, members of the British-Polish Chamber of Commerce can try one of IWG’s business solutions at a 10% discount by visiting the website: https://www.iwgplc.com/partner/BPCC.
“The pandemic situation has shown that people have changed the way they work and think about their offices. Whilst we are able to do many tasks from our homes, we could not do all of them. As a result, employers have begun to look for a more flexible formula for working from an office. This has opened the market to new solutions and made investments in co-working spaces and flexible offices profitable as never before. Moreover, this business has proven to be a kind of pandemic-proof – all of our offices have remained open, while many other franchises have had to either close or severely curtail their operations during these difficult times,” says Mr Dorszewski.
If you want to know more about IWG’s franchise offers please visit: https://franchise.iwgplc.com.
1 Survey of 501 business leaders conducted between 11th-15th December 2020. IWG own data.