This article is part of an ongoing series in which Franchise Times reporters Megan Glenn and Emilee Wentland catch up with emerging brands.
The Coven members in a Minneapolis suburb seemingly can’t get enough of the newest coworking location—which has yet to open.
“They are already almost 100 percent sold on their private offices, and they haven’t even opened their doors yet,” said Alex West Steinman, founder and CEO of the Minneapolis-based coworking franchise. The Coven seeks out members who identify as women, nonbinary and transgender, but offices are open to everyone.
Since Franchise Times last checked in with The Coven, the brand tripled its footprint, from two to six locations in Wisconsin and Minnesota. Four of those units are franchised.
The Coven targets markets in which there’s a need for coworking and inclusive spaces, West Steinman said.
“There’s this real interest in putting more spaces that foster inclusion and foster innovation in these areas,” she said.
For now, those markets are centered in the Midwest.
“It’s been a really unique experience talking to lots of Midwest entrepreneurs who feel the same both challenges and wins in this area,” West Steinman said.
The region is typically more economically friendly than the East or West coasts, she said, and it’s easier for The Coven’s corporate staff to get to a site, if needed.
The brand’s seventh location is set to open in Marshfield, Wisconsin, which is in the center of the state. “It’s a more rural community than that would typically get access to coworking,” West Steinman said. “But there’s a real need for community workspace.”
There are a lot of empty downtown office space nationwide following the pandemic, which creates an opportunity for a new buyer to start a community in those otherwise unused spaces, West Steinman said.
“This is a unique opportunity for franchisees who either want to purchase a building or work with a building owner, to get into space that that may have been sitting vacant for quite a bit of time and build joyful community in those spaces,” she said.
The Minneapolis corporate location’s total gross sales last year were $371,545, according to the brand’s franchise disclosure document. That’s a 19 percent increase from 2022. However, net income has declined since 2019.
In 2019, gross sales were $334,723, generating a net profit of $121,077. In 2020, the offices were closed for four months due to local government pandemic regulations. That year, the space lost $77,318.
The years following lost income as well, but still less than in 2020. In Q1 this year, gross sales totaled $122,598, generating a net income of $18,006.
The FDD doesn’t list sales for its other locations.
The initial investment required to open a Coven franchise ranges from $213,400 to $465,200. Franchisees must spend at least $10,000 marketing the grand opening, and choose from two design packages, which cost $15,000 or $25,000. Royalty fees are eight percent of gross sales per month.
All of The Coven’s franchisees so far own their buildings, which West Steinman said lends the opportunity to include amenities, like retail space or a café on the ground floor.
Franchising taught The Coven’s team to be adaptable. Early franchisees asked for more marketing guidance and sales support. Now, the brand has “an entire library of content” for franchisees to choose from for advertising purposes. The franchise optimized its website to drive leads, too, she said.
“We’ve learned a lot from them about what it is they need to be successful,” West Steinman said. “Not only have we created a level of expertise from our perspective at headquarters, but we’ve given them agency to connect with one another and share resources together and best practices, because each community is truly different.”
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