The remote and hybrid models present an incredible opportunity for franchisors to grow both their footprints and corporate team.
Franchising and the Future of Work: Navigating Remote and Hybrid Business Models In 2023
By Morgan Wood
May 1, 2023
Remote work, hybrid work, work from anywhere, telework, mobile work, hotdesking, coworking…
“Like many times, industries kind of over-complicate it; people are trying to make up these terms to differentiate things that are all the same,” Jason Anderson, president of CoWorks and Office Evolution, explained. “It’s been vastly overcomplicated.”
For coworking or shared office space franchisors, it’s really as simple as leasing commercial real estate, which equips employees, whether through their companies or independently, to work somewhere that is not a corporate office or their own home.
The History of Remote Work
While the remote and hybrid models became increasingly popular when COVID-19 forced employees out of the office for safety reasons, this was far from the start of the industry. Anderson outlines four key stages of remote work, spanning from 1990 to 2023 forward.
“What I like to call Coworking 1.0 was really the first 20 years of Regus,” he explained. “This was about 1990-2010. I got involved around this time and actually opened my first business in a flexible office.”
However, he continued, people who worked from flexible spaces were often viewed as second-class businesspeople. Like many things, flexible work was something for early adopters, and not everyone totally understood it. But from a practical angle, it was a perfect model for those engaged in the gig economy and small business owners who just weren’t ready to commit to a long-term commercial lease.
In 2010, the 2.0 period began, and flexible work started to get cool.
“WeWork really revolutionized the industry,” Anderson said. “It really revolutionized the industry, made it cool, and brought it to the forefront of everyone’s mind in the office space.”
Then 3.0 happened: COVID-19.
“The pandemic created the largest work-from-home experiment, globally, that will ever be conducted,” he explained. “People that had never had the experience of working from home, or companies that never thought they would, were forced to. This took the progress that would traditionally happen over the next decade or two and condensed it to a two-and-a-half or three-year scenario.”
Where Does This Place Us?
After the pandemic, a large portion of professionals had almost certainly made their minds up. They would not, under any circumstances, be returning to the office. The flexible option is just too good to let go of! Some people save hours each day by not having to commute, and the relatively widespread acceptance of remote models has allowed many companies to source talent that is not locally available.
“Now, in 2023, we’re at 4.0,” Anderson explained. “Everybody’s figuring out what to do with the people that do need to come back to the office, and ‘flex-first’ is kind of what I’ve been saying. Everybody is looking at flexible office space; it’s just not something that you cannot be looking at.”
“What further proves this,” he continued, “is that through the pandemic, the government awarded a contract to put federal workers in flexible office spaces. They’re getting rid of a lot of their regional offices. When looking at allowing people to work closer to where they live, flex office space will be the first thing in mind.”
Like many businesses, franchisors have also embraced the model.
Black Bear Diner shifted to a remote model, like many companies, at the onset of COVID-19. In January 2022, the franchisor rolled out a hybrid model that allows staff continued flexibility.
“Since then, we have adopted a hybrid model, which provides our Home Office (affectionately known as The Cave) staff with the flexibility to work from home two to three days a week, or whenever they choose,” Anita Adams, CEO of Black Bear Diner, explained. “Our team members love this option, and we find that it helps contribute to a happier work-life balance overall.”
Adams added that, thanks to Franchise Business Consultants who consistently connect with their respective franchise partners in person and via email, video and phone calls, relationships throughout the network have remained strong.
Other flexibilities, like the option to host discovery days in a market convenient to the prospective franchisee, have been a great benefit associated with the flexible work model.
“We are very flexible with our discovery days to better meet the needs of each potential franchise partner,” Adams explained. “If appropriate, key members of our senior team meet […] a potential franchise partner [who] is considering or in a market where they can visit an operating diner. If they prefer to visit our home office, our senior team is physically present. With either approach, the emphasis is on building personal connections so they understand the level of support our franchise partners will receive from the entire team.”
“There was not a rush to come back to the office for camaraderie once the health concerns had passed,” she explained. “On a daily basis, you might bump into five people; other days, there’s no one there.”
The franchisor still has a corporate headquarters, but there are no in-office requirements. In many cases, Przywara said, people show up to the office when they need to pick up a piece of mail, for example, and choose to stay and work for a few hours.
Though Sylvan does not have concrete plans to mandate a strict hybrid or in-person schedule, she explained that the corporate team is working toward establishing a new, more updated, open office headquarters.
“When you go to our corporate office, even if you didn’t work for us before, there’s still a ‘before’ feeling,” she said. “It’s weird; we knew that we needed to move things around.”
During the height of the pandemic, even though everyone was working remotely, the Sylvan team was working diligently to “fulfill the mission,” creating educational plans and resources for students nationwide who were already struggling with learning disruptions. Now that things have calmed down, the team has been intentional about communicating that it is okay to shut down. Like many report, the model has led to an even more enjoyable work-life balance.
Przywara shared that she personally feels that she has become a “better employee, better manager, better executive team member and better mom,” and the biggest difference has been her ability to reclaim about an hour and a half of commuting time each day.
“What I’ve come to believe is that it really is just the people,” Przywara added. “It was never about us all being together in a physical space. It’s about us all being ‘together.'”
Why the Flexible World Is Better for Franchisors in More Ways Than One
As the model continues, so does demand. However, some companies’ willingness to embrace the flexible model has left commercial office buildings desolate. The leases are not over, but no one cares to work in that building.
“Prior to the pandemic, we were living in an era where more and more people-workers and organizations-were moving toward flexibility,” said Wayne Berger, CEO of IWG The Americas, during an 1851 Webinar. “Back in 2019, over 50% of the world’s workforce was working from somewhere other than a traditional office at least one to two days a week.”
The demand is only climbing, and many building owners are looking for ways to make the most of otherwise empty space. Though a host of companies will take on this challenge on a smaller scale, franchising is the most viable way to take hold of a large portion of the industry.
“We anticipate that 30% to 40% of real estate portfolios will be flexible by 2030, and 17% of that will be flexible by 2024,” Berger added. “This means vacancy rates-which are at 65% in the U.S. in traditional downtown financial districts-are increasing rapidly around the world. Space that is under lease, signed prior to the pandemic, is being underutilized or left completely empty.”
In addition to an overarching demand, Anderson explained that there is a “necessity for franchising in the space. VentureX launched in 2017 and acquired Office Evolution last year. We’re now the third-largest player in the entire industry.”
This size and speed of growth is not something that can be achieved on a smaller scale, and Anderson says successful franchisors should consider taking on the flexible office space market.
“There are a lot of business models that don’t scale if not for franchising,” he added. “We now need individual, localized people to run, manage and grow these companies. All of the major players will need to look at some sort of franchising-domestic or international-to scale and grow for the next decade.”