If you are interested in leveraging a coworking franchise such as Venture X, there are important items you should consider prior to making your decision. In this article, we will break down Venture X’s business model, fees, and what support is made available to franchisees. Towards the end of the article, we will expand on alternative methods you should consider.
Venture X Franchise Model
Venture X is one of a variety of franchises owned by the United Franchise Group, a privately held family company. Along with its coworking franchise Venture X, the group has run other successful franchises such as Sign A Rama, Embroidme, J.S. Subs, and others. The primary business model for Venture X consists of selling a franchise license to prospective landlords, business owners, or developers, in an effort to expand its brand without having to pay for leases or commercial acquisitions.
What Makes Venture X Different From Competitors?
Venture X prides themselves on running professional coworking environments by not cutting any corners. From leveraging top architectural firms, furniture suppliers like Herman Miller, and selling office packages its no doubt why its environments (and fees) come at a premium.
Venture X Franchisee Benefits
From what is publically available, Venture X offers the following benefits to its franchisees:
- Market research and site inspection
- Real-estate negotiation help
- Layout and architectural designs
- Project management of construction
- 2 weeks of training at their headquarters in Florida
- Ongoing franchisee meetings
- Selection preferred vendors (for software, furniture, billing, etc).
- National Ad budget
- Brand recognition
Venture X Franchise Cost
Ok, so we have laid out the benefits of leveraging the Venture X brand. So how much does it cost to run your own? *Please note this is a summary of Venture X’s standard fees. Please reach out to Venture X for a more accurate fee schedule.
Getting Started Capital
- In order to even qualify for the opportunity, owners are asked to have an estimated net worth of 1.5mm and up to $500,000 in cash available to explore the opportunity.
- Prospective franchisees who are looking to open a new Venture X are asked to pay $79,500 to cover their franchise fee. If looking to take over an existing Venture X, it will still cost you $39,500 or 10% of the purchase price.
- In addition to the franchise license fee, you are expected to purchase a marketing package which consists of furniture, fixtures, interior, and exterior signage, wall graphics, appliances, office supplies, and office equipment, multimedia electronic equipment. The approximate amount of this package ranges from $400,000-$800,000.
- Onsite Training estimation: $5,000-$12,000
- Venture X’s model is to take 6% of the gross revenue generated from your spaces ongoing cashflow.
- Marketing fund contribution 2% of gross revenue or a minimum of $1,000/month (whichever is greater).
- If your space is under-performing you are required to spend up to $6000/month on local marketing and advertising in addition to the marketing fund above.
- Estimated Technology fees: $250/month
- Internet, Phone, and Hardware: $800-$4000
- Coworking Management Software: $400-850/month
- Payment Processing: $1,300/month
- Managed It Vendors: $1,450/month
The total estimated investment in one Venture X location: Approx. $1,165,710-$3,000,000. After you are liable for the ongoing costs and 6% revenue share on gross profit.
Are Venture X’s Costs Reasonable For What You Receive?
Venture X offers a lot of value to new owners looking to learn and get into the coworking business. Their templated processes such as training and preferred vendors definitely help point you in the right direction. Since Venture X is a franchise that outsources training and does not own their own software, the prices are greatly marked, up meaning the franchisees bear the burden of the costs. If you have some funds saved up it might be worth exploring the Venture X opportunity.
Is There An Alternative To Opening A Franchise?
The alternative is to partner with a coworking brand like DropDesk. DropDesk owns all of its software, marketing, and training infrastructure, which means the costs do not get passed down to those running DropDesk locations. DropDesk offers the same value as Venture X, without the expensive fees.