Franchise Selection Strategy: De-Risking a 12,000 SF Asset with Unbiased Market Data

The landlord was in final negotiations with three national coworking franchises and was prepared to pay a $75,000 initial fee. However, they lacked unbiased data to determine if these franchises’ rigid, "one-size-fits-all" build-out requirements and office mixes actually aligned with the specific demand of their suburban market.

A property owner in a medium-sized Washington suburb with a 12,000 SF office vacancy. The space had been empty for nine months, and traditional brokerage efforts yielded only three tours during that period. The owner recognized the potential for flexible office space but required a data-backed entry strategy.

The objective was to validate local demand before committing capital. Specifically, the owner needed to determine:

1. If the local market could sustain a 12,000 SF operation.

2. The most profitable business model (Mid-Flex vs. Executive Suite).

3. Which franchise partner offered the highest probability of hitting ROI goals based on the building’s class and location.

• Feasibility Study: A comprehensive market analysis to determine total demand, competitive saturation, and optimal pricing.

• Partner Evaluation: An unbiased comparison of national franchise brands against the specific requirements of the local market and the owner's asset.

Step 1: Market Capacity & Demand Analysis

• We identified a total market capacity of 56,500 SF for flexible office space in the area.

• While 32,000 SF of competition existed, our research showed that 75% (24,000 SF) consisted of "dated executive suites" that did not meet modern professional standards.

Step 2: Model Selection (The Mid-Flex Strategy)

• Data indicated a significant underserved segment of individual professionals and small teams.

• We recommended a Mid-Flex Model, which balances private offices with a professional shared coworking environment. This provided a competitive advantage over the stagnant executive suites nearby.

Step 3: Strategic Franchise Matching

• We evaluated three potential brands against the Mid-Flex strategy and the building's physical constraints.

• Recommendation: DenSwap selected Office Evolution. Their operational model and brand positioning were the most compatible with the target demographic and the building’s Class B suburban profile.