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Race for high-growth franchise space: IWG reports post-Covid boost from small offices

Race for high-growth franchise space: IWG reports post-Covid boost from small offices

  • Regus owner reports 19% increase in sales of flexible offices which accommodate 1-2 people compared to pre-pandemic levels
  • Ambition for 2,000 franchised IWG centres in the UK to meet the demand for flexible, local office space in every town centre and suburb
  • Flexible office space is a strong partner to food and leisure franchises as vaccine roll-out gets UK back into the office, but closer to home

15 December 2020: IWG, operator of Regus and Spaces and the world’s largest flexible workspace provider, has seen a 19%* increase in sales of smaller flexible workspaces, driven by distributed working and employee demand to work closer to home.

From its current 320 centres in the UK, IWG is planning to grow to over 2,000 sites through a combination of franchise and company openings to meet increased demand now and into the future. Franchised IWG centres in suburbs and secondary cities are already experiencing high growth. Suburban London and Cambridgeshire centres reported 20-30% growth throughout the pandemic and new franchised spaces in the Midlands opened with an additional 30% demand above what was expected.

The pandemic crisis has accelerated the trend to hybrid working, which before the crisis was already set to pump at least £12 billion into local economies over the next 10 years, according to IWG’s Suburban Economic Survey. This means the race is on to get into flexible office franchising, according to Julian Chambers, Head of Franchise at IWG:  

“What we are seeing is increased demand from businesses who have learned from the last ten months. They want to keep the benefits of flexible working because they know that it will maximise staff productivity and reduce their overheads. This demand to work in a new way is defined by a combination of working locations. For many businesses this still means a central city office, but it is also a space to work from home, along with flexible workspaces that are somewhere in between the two.

This is good news for franchise professionals looking to strengthen their business portfolio. Unlike gyms, hotels and many food franchises, flexible workspaces were able to stay open to customers during the pandemic, and there is huge unmet demand for new centres in suburbs and secondary cities around the country, with no other nationwide brands in competition. The shift to hybrid working is driving a solid growth in our sales from office workers who want to continue working closer to home in smaller towns and cities, so now is a great time to explore flexible office space within a diversified franchise portfolio.”

As well as the opportunity to get into an unsaturated, growth industry, franchisees are attracted to flexible office space by its lean staffing needs compared to fast food and fitness franchises. Unlike a food franchise, one or two team members are needed locally to run a centre, the majority during 9-5 office hours.

FTSE 250 firm, IWG, which recently joined the British Franchise Association, offers franchise partners a tried-and-tested business model in an unsaturated, high-demand industry. The dedicated UK franchise team offers advice on the best location to open centres, support finding the right buildings, help structuring floor plans to maximise revenue, IT and marketing services and business development.

Pip Wilkins, CEO of the British Franchise Association, said:

“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. We are delighted to welcome them to the British Franchise Association.”

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