NOT EVERY FRANCHISE NEEDS A TRADITIONAL STOREFRONT
Author: Nancy Estep- Critchett (President/Founder of Blue Rock Search LLC)
BEYOND Coworking: How Franchises Are Reimagining America’s Excess Commercial Space
After more than 30 years in franchising and executive search, I’ve had the opportunity to work with an extraordinarily broad range of franchise concepts across dozens of industries. That experience has given me a front-row seat to how franchise models evolve alongside consumer behavior, investment trends, and real estate economics.
One trend I’m watching particularly closely is the creative reuse of America’s excess commercial space.
The conversation often starts with coworking…and for good reason. Hybrid work has created significant amounts of underutilized office space, and coworking franchises have been among the obvious beneficiaries. But I believe the opportunity is much bigger than coworking.
Franchising is becoming an important part of the adaptive-reuse equation, with brands finding ways to transform former offices, banks, and other underutilized properties into productive, revenue-generating locations.
The post-pandemic office market has created an unusual real estate opportunity. Properties once designed almost exclusively around traditional corporate tenants are being reconsidered for a much broader range of uses.
Coworking is one obvious answer. Brands such as Venture X, Office Evolution, and Intelligent Office can convert existing office footprints into private offices, meeting rooms, virtual office services, and flexible workspace. But the more interesting opportunity, in my view, is what comes next.
Franchise brands are increasingly looking at these same properties for healthcare, wellness, beauty, professional services, education, childcare, fitness, and other service-oriented businesses. The future of commercial real estate may not be office versus retail. It may increasingly be office space transformed into consumer-facing services.
Healthcare is particularly compelling as more outpatient and lower-acuity services move into convenient neighborhood locations. For franchise systems, that creates an attractive combination of available real estate and growing demographic demand.
Not every franchise needs a traditional storefront. Many growing service concepts can operate effectively in spaces previously occupied by accountants, law firms, financial services companies, insurance agencies, or corporate offices. Think: physical therapy, dental, senior services, wellness, recovery, beauty, personal training, children’s enrichment, and specialty healthcare. These businesses often need many of the same features an office already provides. reception areas, restrooms, parking, HVAC, waiting areas, and convenient access.
One of my favorite examples of adaptive reuse is the former bank branch. Walk through almost any suburban market and you’ll find bank locations that no longer serve the purpose for which they were built. Banks have consolidated branches, reduced their physical footprints, and shifted more transactions online. Yet these properties often have something franchise operators desperately want: visibility, substantial parking, strong infrastructure, and sometimes a drive-through. That makes them particularly attractive for coffee and quick-service concepts.
Office Buildings as Neighborhood Hubs
The next opportunity may be even more interesting. As large employers reduce their office footprints, some suburban office properties are becoming stranded assets. Yet many are located exactly where franchise operators want to be: affluent neighborhoods, established business corridors, population centers, and communities with strong household demographics. Franchising can provide an answer because franchise systems bring something many traditional tenants do not: a proven operating model and an established consumer proposition.
Instead of one large corporate tenant occupying 50,000 square feet, the building could support a diversified ecosystem of smaller, consumer-oriented businesses. That can change both the economics and resilience of the property.
This is where I believe franchise development leadership is evolving. Increasingly, the strongest FRANCHISE development leaders will need to understand real estate strategy built around the adaptive-reuse equation
They need relationships with landlords, developers, brokers, REITs, and commercial real estate organizations that can guide them to where underutilized inventory exists and, more importantly, which properties can be economically converted for their particular concept.
Relationships with firms such as CBRE, JLL, Cushman & Wakefield, Colliers, and Newmark can be strategically valuable because their networks can provide access to opportunities that may never enter the traditional franchise real estate pipeline.
I don’t think coworking is going away. It remains an important adaptive-reuse strategy. But I believe the bigger story is the diversification of uses. Franchising has always been exceptionally good at taking a proven business model and adapting it to different markets. Now, franchise brands have an opportunity to apply that same flexibility to real estate.
After three decades in this business, what I find most interesting is the intersection of the two. Real estate owners need new uses for excess space. Franchise systems need high-quality locations. Consumers want convenient, localized services. Investors want scalable business models. Those forces are beginning to converge. The winners will be the franchise brands that recognize this isn’t simply a real estate problem. It’s a growth opportunity.
The next generation of franchise development leaders need to know how to turn yesterday’s underutilized commercial space into tomorrow’s growth engine.