Why are Investors Choosing IWG Flexspace over other Franchise Opportunities?

More franchise investors are considering flexible office opportunities than coffee shops or gyms for a more secure future

Think franchise, think flexspace. That’s the message from leading business investors as they look for stability and growth during the pandemic and over the next 18 months.

New 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 franchising*, 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. In comparison, fewer than half said they would be looking to invest in a franchise opportunity with a coffee shop brand (49%) or gym (43%).

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.

A growing trend

This is perhaps no real surprise. Flexible workspaces were already a growing investment opportunity pre-pandemic, with JLL predicting flexspace would make up 30% of all office space by 2030. And with the hospitality sector hit hard by Covid-19, investors are turning to safer options including flexible workspaces, which have remained open during the pandemic.

“Flexible offices remained a growth trend throughout 2020, being one of few industries that were able to remain open despite the various degrees of restrictions,” says Julian Chambers, Head of UK Franchise at IWG.

He adds: “From maximising staff productivity and reducing overheads, to having the ability to work closer to home, we have seen increasing demand from both businesses and employees looking to maintain and further the benefits of flexible working. As we head into a new era of hybrid working, flexible office space is in a prime position to thrive and remain in the top spot for franchise investment.”

Young leaders spearhead the trend

A generational shift has also emerged from IWG’s research, which shows younger business leaders ahead of the curve when it comes to spotting emerging franchise trends. Those aged 18 to 35 who are interested in franchising are almost three times as likely than those aged 55+ to be searching for investment opportunities in flexible office space in the next 18 months (29% and 11% respectively).

However, senior leaders are also starting to take note and looking to benefit from this trend: 40% of CEOs and chairmen who are considering franchising are now looking to explore flexible office space in the near future.

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%).

*Survey of 501 business leaders conducted between 11th-15th December 2020.

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