Why Investing in Co-working Franchise can be a Profitable Option

Vaishnavi Gupta
Vaishnavi Gupta Mar 26 2020 - 5 min read
Why Investing in Co-working Franchise can be a Profitable Option
In the coming future, the co-working franchises will take over the whole market.

Everything around us is changing and the place where we want to work is no exception. While many independent entrepreneurs effectively run their businesses from their homes, coffee shops or other public spaces, the rest look for a more professional workspace for meetings, and to separate personal and professional life. This is where the concept of co-working space comes.

The co-working firm helps a small startup, an independent entrepreneur, or a freelancer to find an affordable workspace. We have observed a significant increase in the demand for the co-working space in recent years, with more companies entering into this segment.

With the rapid rise of entrepreneurial spirit, more and more professionals are craving to get the authority to decide when and how they can work, along with looking for flexibility to choose an environment that motivates or encourages them.

Main reasons for the popularity of co-working spaces

Cost-effective: One of the most important reasons for the popularity of co-working spaces is their cost-effectiveness. These spaces are options with a larger opportunity to flourish. It has also provided opportunities to the real estate market and has emerged as an appealing choice for property owners looking for the efficient use of vacant spaces. 

Flexibility: Another reason for the co-working space’s popularity is the level of flexibility according to the capability and quality of business needs. The flexibility is in terms of rental agreements, improved networking, introduce extensible teams, pay as you use options, etc.

Affordability: As the businesses keep growing, the co-working spaces offer the viable option to scale the team and give an advantage of centrally-located businesses at much more affordable prices and low start-up costs. Furthermore, co-working spaces act as the hub whereby businesses no longer have to sacrifice the location quality for more affordable monthly rent and utility costs.

Statistical view of co-working spaces

At present, India is the second-largest market for flexible workspace in the Asia-Pacific region after China. As per real-estate consultancy JLL, the cumulative area under co-working spaces in India currently stands at 6.9 million square feet.

Presently, there are 1,000 operational co-working centres, with a capacity of more than 4 lakh seats, across six major cities. The number of flexible space operators has risen from single digits to about 350 over the last 3-4 years,

The user base of flexible workspaces will jump 10 times to nearly 3 million by 2025, according to the report. At present, 65-70% of demand for co-working spaces comes from large corporates, 15-20% from small & medium enterprises and 10-15% from freelancers and startups.

In India, the co-working demand is dominated by small and medium businesses and enterprises with the co-working space occupancy at about 90%. These companies are going to dominate the segment and drive demand.

Today, the companies look at converting capital investment into an operational investment, flexibility with a shorter lock-in period, better infrastructure and well-designed workspaces.

Co-working space: A lucrative business option

With this growing demand for co-working spaces in India, it’s high time to invest in co-working spaces. Owning a co-working space can provide various revenue streams that can become a source of regular income. In comparison to traditional office spaces, co-working offices offer better scope for passive income generation.

Today, people starting their own new business or freelancers want to have their personal cabin or office space so that they can work professionally. Due to this, the co-working space becomes the best option for them as they can get the fully furnished office space or ready to move in office space in a low budget. Therefore, it makes the co-working space business a profitable option.

Being the owner of such a modern office, one can lease out or rent out the various work desks to freelancers and start-up firms. They can also rent out working spaces at discounted fees to regular members. Also, conference rooms can be rented out on a daily basis for meetings, training, and video presentations.

While owning a co-working space, the main thing that should be kept in mind is that the location of the co-working space should be good enough so that people can get attracted to it. Besides the area, interiors and pricing also play an important role in owning the co-working space.

Franchise Model

Big companies are running through franchise models in the co-working space and are also earning greater profits in their field. Brands such as Co-offiz and Innov8 are the established players in the field and operate via a franchising model. The reach of such concepts is multiplied via franchising as it is a very low-cost model.

In the coming future, the co-working franchises will take over the whole market. So, if you want to earn high profits, it’s the best time to invest in the co-working franchise.

In order to open a co-working franchise, the initial investment starts from an average amount of Rs 20 lakhs and may range up to Rs 1 crore. The requirement of an area can range from 2500-10000 sq ft.

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