Why franchising and services are the way forward for flexspace

Why franchising and services are the way forward for flexspace

IWG’s CEO Mark Dixon shares what’s ahead for the global flexible workspace industry – and the role it will play in uncertain economic times

In a pair of recent interviews with CNBC and Bloomberg, IWG CEO Mark Dixon shared his thoughts on the way forward for the flexible workspace industry. He spoke about the importance of IWG’s franchise model for the company’s global expansion plans, recognising the value of partnering with local entrepreneurs. “In order to achieve the goal of national coverage – every town, city and suburb – it has to be done with partners,” Dixon said. “For us, those partners are franchise partners, building-owner partners and investor partners.

Rather than focusing purely on city-centre opportunities, Dixon said that flexspace needs to be ubiquitous to truly serve the needs of today’s businesses, which is why franchise partnerships in suburban areas and second cities are vital for IWG. “Scale is critical,” Dixon said. “What the modern customer wants – the modern corporation – they want to use space across a country. The days of ‘headquarters buildings’ and people commuting are becoming less and less, and will be a rarity in five year’s time. That’s what’s causing the change. You need to be where people live, not where people work. And you need to be in every part of the country.”

So far, IWG’s ambitious franchising strategy is performing well – with North America being a stand-out market. “We’ve got a very optimistic outlook,” Dixon said. “We’re continuing with our strategy and I think the future will become ever more clear. The sector’s still very good, the growth’s very good, we’re growing 15% ourselves each year (top line) and [as we continue to add partners] that growth rate is picking up.

“For us, the star of our business is the US and Canada, which have seen fantastic growth. And you’ve got more corporations in America switching over to flexspace than anywhere else – they really are at the vanguard of changing the way that they support their people, and a lot more people are starting to work close to where they live, rather than being forced to commute into the cities. And that trend is something we think is going to pick up more and more in the coming years.”

Dixon also cited the benefits of franchising with IWG – the global market leader in flexspace. As well as being a reliable partner, with more than 30 years’ experience and a proven business model, IWG’s multi-brand flexible workspace proposition – with brands like Regus and Spaces in its portfolio – is in line with the needs of international corporations today. “We believe this is a multi-brand market, similar to hotels – different brands, different price points, different working styles,” said Dixon, “and that has been a successful strategy for us.”

In addition to its fruitful franchising approach and its array of brands helping corporations create bespoke global office portfolios, IWG has also focused on services beyond being merely a physical coworking environment or flexible office space. For example, IWG’s flexible working brands also offer meeting rooms for hire and virtual office services in 3,400 locations around the world, creating diverse income streams.

Franchisees looking to reap the benefits of flexspace may also be interested to know that the industry has an important role to play in the wake of economic slowdown. Dixon explained how the shorter lease lengths of flexspace compared to conventional office space will allow greater scope for corporations to downsize or upscale as needed, and could help businesses balance the books. “This is an industry that will grow, and will grow even more strongly when the next recession arrives,” Dixon said. “Because the demand from it from corporations is very real and grows all the time – especially with the new change in accounting rules.”

Partner with IWG and benefit from the flexspace boom