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“Franchise and shared revenue model is our recipe to grow in suburban areas”

by | Apr 30, 2020 | Business Operations, Coworking, Real Estate | 0 comments

Alexander Stampfer, Co-founder at andys.cc

Alexander Stampfer co-founded the proptech startup andys.cc in Vienna in 2018, a modern workplace operator with a franchise model. We have interviewed Alexander, responsible for the expansion of their locations and the development of andys.cc branch concept, to find out more about the Austrian coworking market and their business model. Alexander will be a speaker at the upcoming Coworking Europe 2020 conference taking place in Vienna this fall, where he will share their insights with respect to their franchise growth model.

Hi Alexander. The coworking market is a more and more competitive environment. What makes you think there are places for new comers such as andys.cc?

There are two main types of companies in this market. On the one hand, you have the big international coworking and office providers who prefer to focus on large locations with thousands of square meters in urban areas. On the other hand, you’ll find a lot of small coworking owners and operators offering very different work experiences and patchwork services. Our growth strategy is quite simple and efficient. It consists of new openings as well as partnerships with existing independent coworking operators. Thanks to our revenue sharing model, we have achieved high scalability without tying capital to a location. Our concept allows us to utilise B and C class properties, as well as smaller locations (>100 m2) and enables us to be located everywhere our members expect us to be.

Our growth strategy is quite simple and efficient. It consists of new openings as well as partnerships with existing independent coworking operators. Thanks to our revenue sharing model, we have achieved high scalability without tying capital to a location

Coworking Europe is coming to Vienna this year. What is it specific to the Vienna coworking market? 

Vienna is so diverse which in turn, creates the widest range of coworking opportunities. A lot of coworking spaces have settled in over the last 12 months, and we believe this is just the beginning. Vienna is the largest city in Austria with 2 millions inhabitants out of 8 million in the whole country. The next largest city is Graz with 443,000 inhabitants. This says a lot about Austria. In our opinion, Vienna is the place to be for the major international coworking players. However, the focus for them is on top real estate locations. We believe that it‘s also important to be present in B and C class locations within Vienna in order to offer high flexible working environments to the people. There are a lot of good real estate opportunities for coworking spaces in these areas, which are just waiting to be regenerated and are far away from the office ghetto landscapes. By comparison, in cities with less than 100,000 inhabitants, not only are smaller areas available for locations, but the demand per location is also much lower. Our branch concept can be very easily and efficiently adapted to locations of 100 m2 or more.

We believe that it‘s also important to be present in B and C class locations within Vienna in order to offer high flexible working environments to the people.

Is the Austrian mindset open for coworking?

Entrepreneurs especially in Austria‘s metropolitan areas already know and love coworking concepts. But we also recognise a trend and an unanswered need in more rural areas, where coworking offers new opportunities to provide people a more flexible everyday life without having long travel distances. Our first coworking space in Lower Austria reflects exactly this phenomenon, as there are more than 7,000 daily commuters to Vienna who would be willing to consider coworking as a better alternative, assuming the offer was available. We have already set the first milestone together with the local municipality and aim at covering this demand long term.

There are more than 7,000 daily commuters to Vienna who would be willing to consider coworking as a better alternative.

Vienna is ranked n°1 in the world in terms of quality of life. How does quality of life and the coworking offering influence one another?

The high quality of life in Vienna is definitely a boost for the coworking industry, and we definitely think we are contributing to it with our concept. Shorter travel times, stronger work focus in a secure working environment and the possibility of networking leading to a significant increase in efficiency. We are not just talking about Vienna. Establishing andys.cc coworking centre on every street corner might also have a lasting influence in terms of quality of life. It’s not only a benefit for Viennese people, it’s a great advantage for long-distance commuters in many rural communities. Coworking by andys.cc and the density of our network helps to achieve a better work life balance and increases quality of life both at home and at work.

andys.cc expansion plans are based on a franchise model. Can you elaborate on that?

Our main model is revenue sharing, allowing property developers and landlords to achieve higher returns, even in B and C class locations. Through franchising, we enable the development of our service concept as a coworking operator throughout the country and rapidly increases our growth. We have already been contacted by some small coworking providers who are interested in joining the andys.cc family. That is a clear, positive feedback from the market showing that we are on the right track!

Our main model is revenue sharing, allowing property developers and landlords to achieve higher returns, even in B and C class locations

What does a franchiser provide to the franchisee? 

We enable not only our franchisees, but also our revenue-sharing partners to generate a very good source of income through our branch concept. From the very beginning we support them in growing a balanced partnership. Based on our experience and data analysis, we take care of planning and designing the coworking space in order to provide optimum coverage of coworking demand. In addition, the franchisee also receives continuous support from us during ongoing operations. We take care of all location-specific sales and marketing activities to optimise the occupancy of the coworking space. Franchisees get access to our platform, showing main KPIs and helping them to best manage and monitor their locations. We provide the technical infrastructure, members billing and members support via our interactive help desk and call center. Franchisees also benefit from regular training sessions to develop their coworking community and ensure optimal working environment. We agree a time period with them, during which we commit to a minimum of members to be recruited according to the size and surroundings of the location. The aim is to show them the profitability of their franchising.

What’s the franchisee candidate you expect? 

Our franchisees obviously love being in contact with people, especially with entrepreneurs. They are service providers by heart and therefore very much client and solutions oriented. Our structures and defined processes make the location management tasks very easy and allow them to fully focus on the relationship with the members. Last but not least, our franchisees must share our passion for coworking and the vision of andys.cc.

Do you see differences between franchises in the coworking industry and the hotel business?  

Yes we do. There are lots of parallels between the hospitality and the coworking industry but the required investment in terms of finance, operation and resource is incredibly lower with our concept. Automation and digitization are core elements of andys.cc and reduce significantly the need for staff. On top of that, scouting for an andys.cc coworking centre is much easier and selecting locations can be made quicker. We have defined parameters, according to how we evaluate a location and can tailor our business model as well as our space concepts very variably to the property.

Could the Covid-19 crisis impact in some ways your vision regarding a longer term future? 

Our vision of building a nationwide network of coworking centres and thus promoting the establishment of flexible working environments has only been strengthened by the Covid-19 crisis. However, location development and design will for sure evolve further, as new trends and requirements in hygiene and space requirements appear. We are already working on integrating these new trends in our evolving concept. Covid-19 is a very tough crisis, which impacts especially entrepreneurs and small businesses who don’t have the cashflow reserves to survive such a crisis. They are a large part of our clients. It changes the rules of the game, of any game, and forces us to adapt. The need for remote working has suddenly exploded since covid-19 and we make these working environments more accesible. Also larger corporations will review the cost of having fixed offices and we are absolutely convinced that andys.cc is an amazing opportunity to move to the next generation working space.

Our vision of building a nationwide network of coworking centres and thus promoting the establishment of flexible working environments has only been strengthened by the Covid-19 crisis.

Join Coworking Europe conference for more insights, data and connections!

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