Major office space provider IWG has started adopting the franchisor model, pioneered by fast-food company McDonald’s, in its effort to edge further away from WeWork.
IWG sells all 122 Japan locations as franchise; Shares rise 23%
IWG has marked its first franchise sale as it sold its Japanese arm for £320 million to real estate company TKP Corporation.
The deal will provide TKP all of Regus Japan Holdings, including 130 coworking spaces. The company’s share price rose 23% after the deal was announced.
Now, TKP has the rights to use the Regus, Spaces, and Open Office brands and IWG will continue supporting the Japanese-based real estate firm through sales, marketing, operations, and technology for a share of its revenues.
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“The transaction realises an attractive valuation for IWG’s shareholders and re-affirms our strategy of capital efficient growth in IWG’s global network with an increased emphasis on partnerships,” said Mark Dixon, chief executive of IWG, who will join TKP’s board as a non-executive director. “We look forward to working with TKP for many years to continue our network development in Japan.”
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