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International Workplace Group Targets Individual Investors for the Investment Opportunity of the Future – Full Absentee, Operated by the Franchisor

As IWG targets aggressive expansion in North America, its unique investment opportunity offers investors a flexible business model in a high-demand market.

By Morgan Wood1851 Franchise Contributor
SPONSORED 9:09AM 09/06/22

As 90% of workers seek flexible workspace solutions from their employers and many companies scramble to provide them, investors are entering the industry at all-time highest rates. International Workplace Group (IWG), a global flexible workspace concept with 1,200 North American operating locations, has brought flexible workspace opportunities to the franchising world under its Regus brand – but in a nontraditional format, hyper-focusing on absentee business ownership

“This is an exceptional opportunity right now for business investors who would traditionally invest in franchise businesses to invest in this high-growth flexible workspace industry,” said Wayne Berger, CEO of IWG The Americas, highlighting that according to Jones Lang LaSalle (JLL), the amount of commercial office space that is utilized as flexible workspace will rise from 4% to 30% by 2030.

According to Berger, though the pandemic triggered a spike in demand for flexible and remote work setups, the industry had been on an upward trajectory in years prior.

“Pre-pandemic, back in 2019, we were seeing roughly 50% of the global workforce working from somewhere other than their corporate headquarters for at least one day a week,” he said. “It was really starting to shift where people were becoming more geographically disparate, and they were using workspace in a more ubiquitous way. The pandemic has done nothing but accelerate these trends.”

The partnership investment model comes to life as IWG partners with landlords who currently have vacant space and are excited to take advantage of the growth within the sector. Regus business investors then come in and deploy the capital for the buildout to convert the property into a flexible workspace, after which IWG will staff, sell and operate the location on the business investor’s behalf. 

While the Regus investment model provides flexibility for business investors depending on how much capital they bring to the table and their level of interest in day-to-day involvement, the concept, regardless of any adjustments, has notably affordable operating costs.

Berger explained that the typical flexible work location requires an average of 1-2 employees total, keeping labor costs low, while many operating expenses such as keeping the kitchen stocked and other general maintenance costs are passed on to the tenant.

“The material costs are signing a lease, if an investment partner chooses to do so, capital to build the location and the traditional day-to-day facility costs,” he said. “Your cost structure is less variable and less precarious than a traditional business.”

Regus startup costs range from $549,000 to $998,000, excluding real estate leasing or acquisition costs. The total initial investment does include a $50,000 fee to be paid to the franchisor.

Multi-site development agreements also include a development fee equal to the sum of the initial franchise fee for the first office to be developed, plus 50% of the initial franchise fee for each additional office you agree to develop. The total investment with the development rights of two to five offices ranges from $1,098,000 to $4,999,000, including between $75,000 for two locations and $150,000 for five locations that must be paid to the franchisor. 

For more information, visit https://www.iwgplc.com/en-gb/develop-a-location.

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