Alex West Steinman, CEO and co-founder of the Minneapolis-based coworking space The Coven, has long been interested in expanding the concept. Now she’s working on the next step in that vision: franchising the business nationwide.
Franchising is a model that makes sense for a company that aims to "economically empower" women, transgender and nonbinary people in its spaces, West Steinman said in an interview. It's "a way to hand an entrepreneurial playbook to someone and give (them) the opportunity to build wealth for themselves and their community."
Already receiving "dozens" of inquiries, the company hopes to have the first couple of franchises open by next year, she said.
Founded in 2017, The Coven operates two locations: one in Minneapolis and another in St. Paul, the latter of which opened just before the pandemic hit in early 2020. During the pandemic, the company began offering digital memberships, allowing members to continue fostering connections in an inclusive space – a key mission for the The Coven, the Business Journal reported.
Now, back in a “expansion mindset,” the company recently completed its official franchise disclosure document, West Steinman said.
Using its focus on designing inclusive spaces and a knowledge of branding, The Coven will provide entrepreneurs – and particularly, women and people of color within the franchising industry – with a playbook to operate in their own community, she said.
Minority groups already do have quite a presence in the franchise industry: Of franchised businesses studied in a report using a 2012 U.S. Census survey, 30.8% were minority-owned while more than double were not minority-owned, figures that roughly align with the minority population in the U.S. Thirty-one percent of franchised businesses were women-owned (versus 52% male-owned) while 15% were equally male- and female-owned, the report said. Women make up about half of the U.S. population.
West Steinman sees even greater support for such groups through the new franchise model. "What I'm really interested in is figuring out, how do we give people more opportunity to succeed as entrepreneurs, particularly women and particularly folks of color, who might be interested in owning their own business?"
The company is focused on expanding to cities that are similar in size and feel to the Twin Cities, such as Denver and Nashville, the CEO said.
“We're looking at places that are underdog cities,” she said. “... We know that those cities are really ripe for the type of innovation and inclusive workspaces that we have here."
The initial franchise fee is $50,000, with a 10% monthly royalty.
Currently, the company has 13 employees across both locations and 1,000 members, both digitally and at physical locations. Though she did not provide specifics on revenue, West Steinman said The Coven has seen a 400% increase in the last year in sales of memberships for teams – that is, small- to mid-sized companies that are looking for a hybrid-working option.
"We’re seeing positive trajectory in coworking,” she said.
