(thanks for the mention, Ashley).
In our model, we did a revenue-sharing agreement. For the initial year, we received 5% of gross monthly revenue in exchange for “free rent”. The revenue percentage has gone up a bit since then. This was a “win win” since it was a service to members and an easy way for these folks to open. (We selected the cafe operators as a result of a RFP process).
With respect to free coffee, we actually kept the free coffee right beside the cafe - the hunch was that people would pay for better and fancier coffees. And they did, though it’s possible that we’ve moved the free coffee to another floor, as Ashley mentioned (a lot has happened since i moved to NYC!). Certainly, the issue of free coffee was always contentious.
Another HUGE issue is that we actually wanted the cafe space to be member’s only. We have a fairly high number of members and so we wanted to sustain it alone, but of course, they wanted to grow their business. In the end, they have opened to a public audience though it’s not formally advertised. Their business is going gangbusters (now sandwiches, breakfast, but still struggling to get a liquor license) but it is causing some tension for us, as we still prefer the main floor to be a member’s only space.
Of course, a huge factor is how your space is configured. In our case, we have a ground floor that is entirely a hangout/event space, so the cafe worked well there. I can see how noise could be a greater concern if the cafe was woven into the main workspace (though, of course, plenty of people do work on the ground floor).
If you have more specific questions, send me a note off-list and I can put you in touch with one of our Ops team in Toronto.
Centre for Social Innovation
Toronto // New York City