Franchiser sets up your 'executive suite' on the cheap
Boston — The trappings of modern office technology, from word processors to teleconferencing, are becoming necessities for many businesses. But what about small businesses which can't afford the outlays necessary to equip and staff such an office?
A fast-growing San Francisco-based franchising concern has the answer.
The Headquarters Companies Inc. took the existing concept of the ''executive suite,'' that is, a complex of single offices for various professionals, new companies, and sales representatives that share common secretarial services, and brought it up to date. It did this by equipping each complex with the latest in office technology.
The result is a well-equipped office at a prestigious address which can be occupied immediately after signing the lease (usually for one year), costing a fraction of what it would require a small business to assemble the same services on its own.
According to William Van Loan, who owns the company's Boston-area franchise, the demand for Class A office space by large corporations in his city is so great that there is no incentive for a real estate agent to divide it into small areas. As a result the only chance a small business or professional has for a good address is through an ''executive suite.''
Last July he leased a floor in a new building in downtown Boston. It was subdivided and fully leased in four months. The year before he did the same thing in suburban Framingham. That facility now has a few offices available. Mr. Van Loan charges an average of about $900 a month. That includes the use of a receptionist, individual telephone answering service, and someone doing about 25 letters per month. He figures it would cost $4,000 or more for a small business to obtain the same facilities and services on its own. It would have to lease enough space for a reception room and to hire a secretary, get an answering service, lease equipment, and so on.
Although Headquarters Companies was founded in 1967, it was with the advent of word processing and modern telecommunications that it carved out its marketing niche and expanded nationally.
Two things set Headquarters apart from other ''executive suite'' companies. The first is that it offers a wide variety of modern services including word processing, secretarial services, computerized phone answering (when one of the office phones rings, the operator sees on an electronic screen the words she is to use in answering), computer graphics (a computer helps make up charts, tables , and other illustrations), and copying. Some of these services are sold to the public. This helps amortize the cost of equipment and creates another profit center. But lessors of office space have first rights to the use of the equipment should capacity be strained.
The second difference is that the company is determined to stay in the forefront of the telecommunications revolution. It recently hired Raymond Zablocki, formerly an ''office of the future'' expert at the Stanford Research Institute, to serve as in-house consultant on these issues.
Headquarters Companies already offers telecommunications links among its offices, including telex and facsimile transmission. In coming months it will add electronic document transmission (so a document typed on a word processor at one office can be printed at another), data transmission for computers, an incoming 800 number so clients can call the tenant toll free, and teleconferencing rooms in each center. Computer graphics, now available in Boston, will spread to other offices.
Thirty Headquarters centers are already in operation, and an additional 71 licenses have been sold. Franchises run around $30,000, plus 0.05 percent of the gross billings once in operation. The cost of setting up an office complex might be $250,000 to $300,000.
Headquarters now projects growth to 400 centers nationally and 200 abroad by 1990.
John Connor, who directs the Office Technology Research Group, a Pasadena, Calif., organization of Fortune 200 corporations, sees the possibility of many national corporations with far-flung offices using facilities such as those offered by Headquarters for telecommunications and computer links. Traveling executives and sales people will be able to have instant access to corporate data banks wherever they travel. By renting the telecommunications facilities by the hour they can benefit from the technology when they need it without a major capital investment.