Could the movement currently shaping the future of work also be the future of franchising?
The demand for flexible workspace across the world has seen record growth in the last few years, with flexible working spaces set to grow up to 30% annually for the next five years, according to global real estate giant Jones Lang Lasalle (JLL). These impressive statistics are why franchising is becoming the natural next chapter of the flexible workspace story and why it will be one of the key accelerators that will aid this growth.
Entrepreneur.com’s annual Franchise 500 is the definitive ranking of the strongest franchise brands and in its latest report, it finds that we are long past the days of associating franchising with fast-food restaurants. In fact, the franchising industry is constantly being rejuvenated with new players as it moves towards becoming truly international.
Traditionally, franchises have been considered the preserve of the consumer lifestyle industries – retailers, restaurants and hotel chains are common options for property decision-makers looking to invest, because of the brand recognition that a lot of businesses in these sectors hold.
Flexible workspaces are now becoming woven into the fabric of our societies, offering flexibility to businesses and their staff whenever and, crucially, wherever they need it. A new trend is emerging that is seeing an increasing number of co-working spaces housed within vibrant retail shopping centres offering opportunities for those who want to work in bustling hubs with many amenities on tap.
With 50% of all employees in the South Africa working remotely most of the time by 2020, it won’t be long before we see business hubs becoming destinations for both serviced offices and retailers.
With the soaring popularity and growing necessity of flexible working in major hubs across the world and the global mobile workforce set to hit 1.87 billion people by 2022, would-be franchisees would do well to consider the other options available to them, in order to benefit from this huge growth potential.
Along with new franchising opportunities, comes a new audience. The Millennial generation is fast being seen as the future of the franchising market for a variety of reasons, chief among them, their desire to work flexibly, as well as their affinity with new technologies. Collaboration and teamwork is one of the biggest benefits of a franchising model and millennials are tuned into this way of working.
Franchising offers opportunities on a truly global level. It is a business sector operating at ‘record heights’. Findings of a recent survey by the Franchise Association of South Africa (FASA) found that, despite a challenging year, the franchising sector continues to show resilience and growth with an estimated turnover of R 721 billion, equivalent to 15.7% of the total South African GDP.
Franchising provides the confidence of an established successful business model so entrepreneurs do not need to start from nothing, but nor do they need to be an employee. They’ll have the opportunity to pour their own enthusiasm and hard work into a concept with the confidence of a wider business behind them.
Flexible, serviced offices have undoubtedly begun to emerge as investable asset classes for institutions, with unique service offerings and income potential available to make the most of. The operating model is proven, demonstrably successful and opportunities for growth are significant on local, regional and national scales, especially with brands that are globally renowned and therefore benefit from good brand equity.
We could soon see flexible workspace taking its place alongside hotels and student accommodation as a separate asset class and a core part of institutional portfolios. It is an even more thrilling prospect that the under-30s are leading the charge for those franchisees looking to get involved.
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