Written By: Mike Kriel, CEO of Launch Workplaces
I heard a story recently that struck a nerve with me.
I was speaking with a landlord who told me about his recent experience with one of the massive multinational coworking operators.
Two years ago, he’d signed a management agreement with this operator. And as it turned out, the operator wasn’t delivering what they promised. It wasn’t underperformance that was bothering this landlord–that was to be expected, given the pandemic.
What really bothered him was that the operator had promised a true partnership. But now, he was effectively being stonewalled.
This got me thinking: your coworking operator should be your partner. But are they really? And how can you ensure it’ll stay that way from the outset?
Don’t Just Take Their Word For It
The best way to find out if your coworking operator will really be your partner is to spend some time with them.
You need to know more than what they’re telling you in the sales process.
- Touring their locations: Do they reflect what the operator promises they’re going to bring to your building?
- Getting hands-on insights: Talk to members and staff in existing locations to get their opinions. What’s your read on them?
- Asking for references: Ask the operator to give you the phone numbers of their two best and two worst locations. If they have the nerve to do that, they’re a great operator.
The key is that you want to see how you’d work together as partners.
Make Sure Your Management Agreement is Buttoned Up
Once you’ve done your due diligence and decided to move forward, the next step will be getting into a flexible office management agreement. This is an extremely important process, and there are a few things to ensure are reflected in their to guarantee a strong partnership.
The first thing to include is a detailed outline of performance measurements and timelines. You need to know what success will look like.
You’ll also want to include a caveat that you approve budgets. For instance, any variance over a certain percentage or dollar amount over budget should come to you with an explanation. At Launch, we provide weekly reports to our owners as we’re growing which outline goals, active leads, and a number of other metrics.
Transparency creates trust.
That all being said, I would also advise that it’s important to give your operator leeway to act as experts. After all, transparency and trust are two-way streets.
Always Know When to Walk Away
It’s always important to know when to cut your losses if your coworking operator isn’t living up to their end of the deal.
The day that I spoke with that landlord, he was getting ready to send a letter to his coworking operator putting them in default of their agreement and telling them he wants them out of his building.
See, he told me that if the operator had only talked to him—treated him as a partner—this wouldn’t be happening. But instead, the operator opted to respond to his questions by telling him it was none of his business.
Know your limits. Know when to walk away.
The best flexible office relationships are true partnerships built on transparency and trust. If you’re looking to add flexible office space to your portfolio, make sure you cover your bases to ensure that’s what you’ll get out of the deal.
And if you’d like to learn more about how Launch partners with landlords to put profitable flexible office spaces in their buildings, get in touch with me today. I’d be happy to speak with you.