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Everything You Need to Know About a Coworking Franchise Model

Nick Shaw
Nick Shaw
Everything You Need to Know About a Coworking Franchise Model

The overall value of global coworking spaces is predicted to grow annually by around two billion US dollars between 2022 and 2030. Due to the affordability and flexibility of coworking spaces, businesses in this sector could expect to take a lucrative slice of the forecasted market value (a cool 24 billion US dollars by 2030).

How Popular Is Coworking?

The concept of coworking relates to a style of work where people share a common workspace for their independent work activities. Offering low-cost office space for workers seeking refuge from the solitude of working at home, coworking spaces are a haven for people from all walks of life and industries.

In 2017, there were just over 4,000 coworking spaces in the US - with forecasts to rise to over 6,200 by the end of 2022. According to projections, global coworking spaces will see figures of nearly 42,000 by the end of 2024.

These staggering market growth projections are paving the way for coworking franchise model opportunities. If you’re running a coworking space, and find that your web-based appointment system is always booked in advance, with no room for new members, it might be time to consider expanding in the form of a franchise.

What Is a Coworking Space Franchise?

A coworking space franchise isn’t too dissimilar to a regular franchise in any industry. A coworking franchise model is typically a business format franchise, whereby the franchisor sells the right to use their business name, concept, and trademark to the franchisee. Franchisees under this model are run according to the parent company’s rules and guidelines.

Upon agreement, and after drawing up a rental lease agreement template, the franchisee is then responsible for owning and managing the coworking space under the name of the franchisor. The franchisee collects a percentage of the overall business’s revenue as a result of holding a coworking space franchise.

The Benefits of Being a Coworking Space Franchisor

One of the obvious benefits of becoming a coworking space franchisor is rapid scalability and an increase in revenue. Entering into a franchise agreement with like-minded business people eliminates the ongoing heavy lifting of daily operations while simultaneously growing your business.

From your end, taking on franchisees means you have minimal capital and liability to worry about, as your franchisees handle the majority of the setup costs. You might want to consider a specialist team that takes care of your branding, policies, and operations - that way, you can rest assured your franchisees are building their businesses in exactly the same format as your franchise model.

Within this team, a customer experience specialist is a smart hire. They are experienced project managers who are able to work closely with internal stakeholders to ensure that consistent franchise goals are reached.

Other franchisor advantages include:

  • New and desirable locations to generate brand awareness - with the franchisees investing in establishing a business in these areas.
  • Additional revenue streams - franchisors benefit from monthly franchise royalties from each franchisee’s location.
  • More advertising exposure - expanded advertising power through franchisees and their locations means that advertising works harder.

Building a Coworking Franchise Model

For your business to evolve into a franchise, you must first ensure that you meet the basic franchise standards. Your business must be sustainable and coachable, provide a decent return on investment, and above all - have a unique selling point.

Coworking space interior

The key to a successful coworking franchise model is a strong foundation. The strength of your business’s brand will help you find potential investors and franchisees.

1. Develop a Business Strategy

Your franchisees will want to see a franchise model that is successful and repeatable. The first step to building your successful coworking franchise model is to develop a robust business strategy. This involves deciding how you’d like your first franchise to run, and how you plan to enforce your business’s operating standards.

This step is similar to creating warehouse management operations processes that are designed to optimize warehouses’ supply chain distribution and fulfillment processes and ensure smooth service deliveries. Your coworking space needs similar processes in place that can be easily implemented in a new location.

Part of developing your business strategy is considering exactly how you want your business enterprise to grow - is the sky the limit, or are you going to focus on national growth? Decide how many locations are the optimal number for now, and you can reassess as you go.

2. Seek Legal Advice

Legal advice before building a franchise

As you build your franchise model, it’s wise to get legal advice from a specialist franchise solicitor. You must know the local laws and demographics of the areas you plan to expand in and obtain any necessary permits. Your solicitor will draw up a franchise contract containing all the information you need for your viable franchise. You’ll get advice on your best position, how to protect your brand name, and cover the terms for your franchisees as they come on board.

3. Choose Your Fee Structure

Most coworking franchises work on a revenue-sharing model. Decide whether you’ll offer a percentage or fixed fee in addition to an initial fee to cover setting up the cost of the franchise. A percentage fee structure means that as the franchisor, you’ll receive more recurring income when your franchise is successful. Decide if you want to offer membership schemes, and if so, whether you’ll allow your franchisees a percentage of the membership fees as well as the business.

4. Decide on Your Franchisees

Ensure you do your due diligence on prospective franchisees by checking their background and that their values and business goals align with your own. Remember, your franchisees are out there representing your brand, so you must make sure they’ll do a good job of it!

5. Consider Software

Tools like coworking space software offer value to your customers and keep retention rates high. A centralized place for your business’s information and memberships provides quick access to the data you need. Potential franchisees will delight in a specialist system that makes it easier for them to run their businesses - and you’ll benefit from operations oversight, too.

6. Franchisee Support

Once these steps are in place, you’ll need to decide how much support to offer your franchisees. For example, you can assist with helping franchisees to find the right coworking space location, and with planning and designing the coworking space.

As a successful coworking business professional, your franchisees will be looking to you for continuous operations support. And it’s in your best interests to give it to them - which includes tried-and-tested marketing activities to optimize the occupancy of the coworking space, and regular training sessions to develop coworking communities.

For the best chance of a profitable franchise, create achievable KPIs and give your franchisees access to help manage and monitor their locations. Whether you choose to use an Excel forecasting template for this, or an alternative system, you’ll get the best results from your franchisees when they know what you expect from their locations.

Think about:

  • What kind of training will you provide?
  • How much ongoing support do you plan to provide?
  • How will you determine their competency as franchisees?

7. Additional Coworking Space Services

Increase your franchise revenue by seeking opportunities for additional services to offer added value to your coworking members. These services can vary from coworking membership shopping experiences to daycare facilities, and more. Some ideas include:

  • Dog-friendly areas
  • Secure lockers and bike rooms
  • Gym facilities
  • Wellness programs and workshops
  • Conference room use
  • Access to a shared printer, scanner, and copier
  • An outdoor working space
  • Reception services

Venturing into providing refreshments such as hot drinks and snacks is something you’ll need to consider adding into your business strategy, as this delves into the realms of inventory planning methods, unless you outsource this service.

Another option is to partner up with nearby businesses to provide exclusive coworking membership perks and benefits. These can vary from discounted coffee to monthly pilates membership at a local studio. These kinds of benefits are great for retaining members as well as delivering marketing opportunities and building valuable local partnerships.

Launch new locations and manage your multiple locations with an easy-to-use coworking space management platform

Drawbacks of Being a Coworking Space Franchisor

This wouldn’t be a balanced article without mentioning some of the disadvantages of becoming a coworking space franchisor. The rewards are great, but when you become a franchisor, you have the sole responsibility of managing the franchisees working for you. This means you become a people manager - which isn’t for everyone.

The challenges of owning a coworking space franchise are that you are likely to come across disagreements in running business operations, and it can be tricky to manage multiple people at once (especially from a remote location). Much like multichannel inventory management, you’ll need robust tools and strategies in place to handle different people and locations.

Ready to Franchise?

If you’re certain that your coworking space is a successful repeatable business model, and you have the processes nailed to ensure smooth scalability, perhaps now is the time to franchise. Regardless of your business’s unique selling points, remember that customer service is always an integral part of a great franchise. That means getting the right franchisees to support and promote your brand in their chosen locations.

Franchising takes effort, attention, and time, but the rewards are plentiful if you’re ready to put the work into scaling your coworking business. Good luck out there!


The article was written by Nick Shaw. Nick has been the Chief Revenue Officer (CRO) of Brightpearl, the number one retail-focused digital operations and omnichannel retail platform which encompasses sales and inventory management software, accounting, logistics, CRM and more, since July 2019 and is responsible for EMEA Sales, Global Marketing and Alliances. Before joining Brightpearl, Nick was GM and Vice President of the EMEA Consumer business at Symantec and was responsible for a $500m revenue business. Nick has written for sites such as Bigcommerce and Crowdfire. Here is Nick Shaw’s LinkedIn.


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