Office Space Advice
Intelligent Office Franchisee Speaks of Industry Growth
Published June 22nd, 2009 by Jennifer LeClaire
Have you ever considered buying into a serviced office franchise?
While the Regus Groups of the world are expanding based on corporate financial strength, brands like Intelligent Office are selling franchises that help entrepreneurs get up and running quickly so they can, in turn, help other entrepreneurs get up and running quickly.
Intelligent Offices are located across the United States and Canada, and new locations are opening all the time thanks to the franchising program the company started in 1999. As technology continues to develop, Intelligent Office is on top of it, using advances in communications and other areas to provide innovative office solutions that help its customers be more productive.
What does the executive office suites world look like from the perspective of a franchisee? Pretty good, if you ask Roger Kahn, owner of Intelligent Office of Garden City, New York.
aBetterOffice.com caught up with Kahn to discuss his reasons for buying an Intelligent Office franchise, how business is faring in a down economy, and what differentiates his company from the competition.
Why did you buy an Intelligent Office franchise?
I purchased an Intelligent franchise because I see Intelligent Office’s services addressing the office space and communications needs of an increasing segment of the business community.
Had you been in real estate before?
I had been a senior executive with several of New York City’s leading real estate firms prior to my purchase of the IO franchise.
Are you seeing an uptick in business during the recession?
I am not seeing a major uptick in business. So far, new business leads are down, yet the closing ratio is up. This means that the prospects we are working with are more serious about moving forward. As time goes on, more and more of the unemployed, especially those in the financial sector-dominated New York area will realize that they will have to start their own businesses in order to begin generating income again. The uptick in our business will coincide with that.
Where are you seeing more growth? On the serviced side or the virtual office side? And why do you think that is the case?
I am seeing more growth on the virtual side, but that is because of my specific circumstances. Intelligent Offices focuses more on the virtual business than the serviced side. My facility has just seven serviced offices. They are all leased, and have been leased continuously for the past several years. I have been able to lease any office that comes available within days of my knowing that the existing tenant is not planning to renew. With this profile, my growth is clearly on the virtual side.
What differentiates Intelligent Offices from the local competition?
We are different in several ways. First, Intelligent Offices is the only local firm that focuses on the virtual office client. All of our policies, procedures and services are designed with the virtual client in mind. These policies and procedures work very well for our serviced, or full-time, office clients, but the reverse is not always true. The policies and procedures of a serviced-office facility do not always serve to improve the experience of the virtual office client.
Second, there is an absolute and total dedication to the servicing of our clients. We always go the extra mile for our clients – both during the business day and after-hours.
Thirdly, the owner is fully involved in the business. I am in the office most days of the week. If a client has a question or an issue, I can deal with it right then and there. There is no hierarchy to deal with, no off-site corporate manager who has to be consulted, and absolutely no bureaucracy. When clients have questions, or on the rare occasions they have service issues, they value what is basically resolution within minutes.
Do you have a specific target audience within the general “entrepreneur and small business owner” target that many in the serviced office industry are going after? And why do you target these specific audiences?
I don’t have a specific target audience. I like to bring in people who will be active users of the space once they sign on. The meetings, the closings, the presentations, etc. all bring an energy to the office that feeds on itself. Plus, these meetings bring non-clients into the office who get to see first-hand our impressive facility, and they get to experience first-hand the professionalism of our staff and the comfortable work-environment.
What do you see as the biggest challenges for companies in the executive office suites industry these days?
The biggest challenge is the fallout from today’s economic climate. Clients’ revenues are under increasing pressure and some may not have the staying power to weather the storm. At the same time, and particularly in the case of firms that focus on executive suites, there is extreme pressure on rental revenue. Availabilities are up, rental rates are down, and the rents that many executive suites companies are paying to their own landlords are fixed in leases that were established in headier times for the real estate market. Margins are being squeezed on many fronts.
What are the most popular services that you offer?
Our virtual office packages are our most popular services. These give our clients all of the image, resources, and support of a traditional office without the big overhead, long-term commitment, and large upfront investment in improvements, furniture, equipment, and security deposits.
A lot of our clients are very excited about the new phone system that we just installed. It enables them to receive their voice messages as transcribed emails and/or audio files. It enhances the virtual office experience.
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About the Author
Elizabeth Sanchez June 22nd, 2009 at 9:02 am
I didn’t even know there had franchises in the executive office suites industry. Very interesting. That’s a great, lower-risk way for brands in the serviced office industry to expand more quickly. I know it’s difficult to get on board as a franchisor, though. Lots of legal hoops to jump through. Intelligent Office seems to have it figured out and at least this franchisee is doing well.
Bill Brookshire June 22nd, 2009 at 9:57 am
Intelligent Office does a lot of things right. This company is known for locating in places with first-class office space. I like the fact that they make available full-time or part-time office space. I love the Intelligent Assistant model. Everything is on an as-needed basis. I know that’s the basic model, but Intelligent Office has strong brand trust. This franchisor is, well, intelligent.
Maggie Correta June 22nd, 2009 at 10:27 am
I thought it was interesting that this franchisee hasn’t seen a major uptick in office space rentals — and he’s honest about it. I also found it interesting that he’s getting fewer leads, but better leads. That’s not a major problem. Actually, if more of the leads are closing, that’s a good turn of events. With only seven shared office spaces, I can see why there’s a stronger demand for the virtual office services.
Rob Zeus June 22nd, 2009 at 10:56 am
What’s up with the parameters on an Intelligent Office franchise? What does it cost to buy into one of these shared office concepts? I think this is a great way to go, if it’s affordable. So many franchises cost an arm and a leg to get into. But then again, franchises rarely fail. Any details would be appreciated.
Jennifer LeClaire June 22nd, 2009 at 11:05 am
Rob – I got this from their web site — actually the cache. The Intelligent Office web site is down right now… could it be that traffic from this article caused the site to crash?
An Intelligent Office franchise features an investment level between $450,000 and $600,000. You must meet these minimum financial requirements in order to be eligible for becoming an Intelligent Office franchisee: Minimum Cash Requirement $200,000.
The company says this is a great franchise opportunity because you have a regular lifestyle with Monday through Friday business hours. The company puts it this way:
“With Intelligent Office, you won’t have to worry about the overtime and weekend work schedules associated with most other franchises. Plus you’ll enjoy a generous exclusive territory. You can expect to spend your time interacting with an upscale clientele. And you’ll feel rewarded, knowing that you’re helping them as much as they’re helping you.”
Mike Sullivan June 22nd, 2009 at 11:43 am
There are a number of compelling business models for growing in this industry, and one of them is through franchising. I’m sure there are several business plans for new franchisors sitting on investors’ desks right now, and probably several “flagship” locations established (but not publicized as such).
But that is pure speculation
Mortimer F. September 13th, 2009 at 7:22 pm
What this franchisee isn’t mentioning is that Intelligent Office reports almost zero income as a franchisor, and most franchisees I spoke with complain that it’s not a profitable operation.
It seems that whatever benefits come from the advertising pool are taken away by the high royalties and numerous other competitive restrictions.