CEOs and entrepreneurs from around the world share essential tips and advice for those looking to invest in the flexspace market.
The boom in hybrid working meant that 2021 was an incredible year for flexspace.
A report from JLL predicted that flexspace will make up 30% of all office space by 2030, and that was prior to the pandemic. So that figure now represents a conservative estimate.
Indeed, research from IWG revealed that just 13% of FTSE companies expect a full return to the office. That study also found more than half (56%) of business leaders interested in franchising said they are either considering becoming a flexible office franchisee or will actively look into it in the next 18 months.
Meanwhile, partnerships with global serviced office provider IWG rose by 350 per cent in the first half of 2021. And there is serious momentum behind franchising, with new growth commitments in 102 locations made between July and the end of September 2021.
So, as we kickstart a new year, what tips and insights do some of IWG’s existing partners have for future investors?
Look to the suburbs for growth
Adoption of hybrid working, which has resulted in many companies downsizing their city-centre HQs, supplementing them with access to flexible workspace nearer to where their employees live, is one of the biggest drivers for more flexspace.
The real growth opportunities are therefore now in the suburbs, not city centres. This is something UK franchise partner James Wright recognised when he signed a deal to open five IWG centres in heavily residential neighbourhoods of northeast London, including Camden, Highbury and Islington, Hoxton and Bethnal Green.
“If companies are signing deals to provide employees with access to flexible workspaces, where do we see young professionals from big corporate clients living?” he asks.
“Where do we see suitable office stock that we could get access to, and where do we see transport and ancillary services that can accommodate the type of workers that we’re going to want and need? These kinds of areas tick all of those boxes.”
Act locally, think globally
IWG members benefit from being part of a worldwide network that is four times larger than its nearest competitor.
And IWG has a truly global geographic spread, with 3,500 locations across 120 countries with unrivalled coverage in suburban locations. Customers, wherever they are, can drop into any IWG centre.
Plus it provides local franchise partners with the reassurance that they are buying into a global, long-term strategy.
“IWG is always ahead of the curve,” says American IWG franchise partner John Schmidt. “As well as the top management quality, the overall vision of Founder and CEO Mark Dixon about where the business is going puts it five steps ahead of anybody else.
“Any investment capital that we have with IWG goes straight into plans for the future – one, two, three, four, five years down the road – while most of the competitors in the space are just trying to stay alive and relevant. We trust that the guys at the helm, at IWG, are making the right decisions for our money.”
Mixed-use spaces make good flexspace locations
New franchise partner Jugkarut Ruangratanakorn plans to boost occupancy from the get-go by opening centres in some of his firm’s existing mixed-use developments in Thailand. These include hotels, condominiums, shopping malls and other retail outlets – all of which should ‘feed’ customers into a conveniently placed flexible workspace.
The CEO of Thai real estate business Ratanakorn Asset believes that the future lies in providing people with easy access to everything they need within a short walk or cycle ride from their home. In his view, the so-called concept of the 15-Minute City is crucial – and with people no longer required to commute to a central HQ every day of the week, their role in the new world of work will be very different.
“There is no longer the need for businesses to own their own offices or to commit to long-term leases,” says Ruangratanakorn. As such, prospective partners have an opportunity to meet the increasing demand for hybrid work solutions, whether it’s for a huge multinational firm, a start-up or an individual entrepreneur.
Put customers first
“It’s not only about the money,” says franchise partner Victor Tighinean who signed a franchise deal to open 10 new centres in Romania. “Most important is customer satisfaction. I also want to create a professional team that is like a family. Then, of course, it needs to be profitable – but profit is not the most critical thing for me when building a business. If you have happy customers and a good team, then profit will come.”
Commit to your own success
Gaurav Sharma is set to open eight Regus centres across the Indian state of Rajasthan, starting in 2022. His key piece of advice to someone considering becoming an IWG franchise partner is to have a strong commitment to do what it takes to make it a success.
“First of all, don’t try to get into franchising just because everybody’s doing it right now,” he says. “Just running the centre and filling it up is very difficult. So only being involved by delegating will not work. You have to be actively involved.”
Experience and knowledge are key
While the rewards are great, becoming a franchisee is not something to rush into, says Cesare Lanati, IWG’s first franchise partner in Italy. The CEO of BELL Group, which signed a deal to deliver 10 new centres over six years, claims that, without in-depth knowledge and experience of the industry, it would be a struggle to meet the requirements necessary to partner with a highly prestigious company such as IWG.
However, as the world’s leading provider of flexible workspace, founded over 30 years ago, partners can be reassured by the fact that IWG has the experience and track record to support partners - whether experienced real estate professionals or entrepreneurs looking to diversify - on their journey.
Lanati adds, “When I began to consider the possibility of working with a big brand, the main thing about IWG that impressed me was the fact that they have a great track record in the flexspace industry, as authentic precursors in the field. They also have obvious skills in managing the business efficiently on a local, national and international level.”
Are you ready to meet the demand for flexible office space in 2022? Find out more about IWG’s franchising partnerships today.
