Flexible workspace provider IWG said Tuesday it hopes to accelerate growth across the country by offering its franchisee program in Canada.
IWG is the company behind brands such as Regus and Spaces, and already has locations in Toronto, Montreal and Vancouver. It is continuing to expand as the co-working trend grows both in this country and internationally.
The industry has experienced accelerated growth in recent years. Commercial real estate services and data firm JLL recently estimated as much as 30 per cent of commercial real estate office space could be devoted to flexible workspaces during the next decade.
“Three-in-10 buildings on every high street around the world could offer a new franchise opportunity in the coming years,” says Wayne Berger, CEO, IWG Canada and Latin America, in the release. “The serviced office market is one of the most exciting growth markets in the world, and the next frontier for franchise operators.
“We are excited to partner with new franchise operators to bring the many benefits of flexible working to more people and businesses across Canada.”
The company already offers franchise opportunities in most other major markets across Europe, Asia and Africa a spokeswoman said, in reply to questions emailed by RENX. It also recently expanded franchising to the U.S.
What IWG seeks in investors
IWG says it has put in place a “comprehensive infrastructure” to support franchisees in Canada. The global IWG franchise team will work with franchisees to assist in determining suitable locations and designs and help grow their market footprint via operational and marketing support.
IWG is seeking partners with the organizational and financial capabilities to open a minimum of five locations, no smaller than 10,000 square feet, over a two- to three-year period.
“IWG franchise partners will have exclusivity rights over a particular development cluster determined by the franchise partner and the IWG franchise team,” the company told RENX. “Franchise partners will be responsible to select, build and operate centres in desirable locations within their development cluster.”
It wants franchise partners with a minimum net worth of $3 million and a minimum of $1 million in liquid assets.
The initial investment would range from $750,000 to $1.9 million per location. There is a $50,000 franchise fee per location. IWG wants franchisees to have proven sales, management and entrepreneurial experience.
“Imagine being given the chance to work with previously successful franchise industries such as restaurants or gyms at the beginning of their growth explosions,” says Steven McAnulty, IWG Canada’s director of franchise development, in the release.
“A similar or even larger opportunity awaits in the serviced office market. It’s a phenomenal opportunity to diversify away from traditional franchise industries and benefit from strong cash returns and significant returns on investment.”
Franchises are available for all four of the IWG Brands: Regus, Spaces, HQ and Signature by Regus.
IWG’s Canadian expansion
The company recently announced four new Canadian corporate locations will open in 2019, three in Toronto and one in Ottawa – a new market for IWG. Together, the four new sites will add more than a quarter million square feet to its Canadian portfolio.
Figures provided by IWG estimate the flexible workspace industry could contribute $369 billion to the Canadian economy by 2030. It projects the number of Canadian jobs associated with flexible workspaces could grow by 59 per cent.
“This first-of-its-kind franchise program provides a unique opportunity for franchisees to enter the fast-growing flexible workplace industry and to help facilitate the rapid expansion of IWG’s Canadian and global network,” the company says in the release.
Since founding the industry in 1989, IWG has over 30 years of experience operating flexible workspaces. IWG currently operates a network of over 3,300 centres in more than 1,100 cities and 120 countries.
EDITOR’S NOTE: This article was updated shortly after being published to add additional information about franchising, which was supplied via email by an IWG spokeswoman in response to questions from RENX. It was also amended to correct erroneous information, which had originally been provided by IWG, about the financial requirements for franchisees.