THE BEST FRANCHISES FOR VETERANS
If you’ve ever done any research about franchise businesses, you probably already understand that it takes a certain type of personality to be a successful franchise owner. It’s technically a different mindset than that of an entrepreneur, but there are a lot of overlapping characteristics. Successful franchisees generally have some business experience already, and are committed to building a successful business that they can call their own, but want to do this based on an already-established business model. Someone else — the franchisor — will have already taken on the largest amount of risk and developed the concept.
Successful franchisees are focused, organized, disciplined, and committed. They operate well as part of a team, but are capable of independently making important decisions. It’s exactly this set of characteristics and more that make military veterans well-suited to becoming successful franchise owners. However, there are some franchise businesses that are better choices than others for veterans. In this article, we’ll explore why veterans make great franchise owners, examine franchise incentives for veterans, and determine which are the best franchise brands for interested veterans and their families to invest in.
Why Veterans Make Great Franchisees
The same qualities and characteristics that have enabled veterans to excel in the military also make them ideal candidates for franchise ownership. Below are the most important of these characteristics, accompanied by reasons why each can serve as a benefit within the world of a franchise owner.
Benefit as a Franchisee
|» Can effectively manage a team||» Able to effectively manage employees|
|» Leads and motivates others||» Able to lead and motivate employees, staff, and fellow franchisees|
|» Follows established procedures and guidelines||» Able to adhere to franchisor’s established business guidelines and overall system|
|» Solves problems||» Able to find effective solutions to daily business issues as they arise|
|» Makes informed decisions quickly, with confidence||» Able to make informed decisions about daily business quickly and unwaveringly|
|» Easily adapts to change||» Able to adapt to change coming from the franchisor or within own franchise|
|» Demonstrates high level of perseverance||» Able to consistently push business forward, even in difficult times|
|» Establishes and follows a long-term plan||» Able to establish and follow their own plan, coupled with that of the franchisor|
|» Has the ability to rely on a support network||» Willing to rely on support of employees, fellow franchisees, the franchisor, support staff|
|» Understands a “bad day”||» Knows that a “bad day” can present a challenge|
|» Recognizes the importance of a strong team||» Understands that everyone involved in the business plays an important role in its success|
VetFran: Providing Veterans With Franchising Opportunities
Many years ago, franchise brands began to realize that military veterans are ideally suited to becoming successful franchise owners. Today, the International Franchise Association (IFA) actively participates in and promotes VetFran, a strategic initiative designed to “provide access and opportunities in franchising to our nation’s veterans and their spouses.”
Founded in 1991 by Don Dwyer Sr., founder of the Dwyer Group, as a way to thank veterans returning from the Gulf War, VetFran was relaunched by the IFA post-9/11 to provide a way to help veterans and their families assimilate and transition smoothly into the civilian economy. Today, more than 650 franchise brands, making up more than half of the brands within the IFA, participate in the VetFran program by offering special incentives for veterans and their spouses. Through the program, more than 203,000 veterans have been able to find business opportunities as either franchisees or franchise employees.
According to 2014 Veterans in Franchising: A Progress Report, the following has been the case since 2011:
- A total of 5,608 veterans have become franchisees.
- Veterans have taken ownership of one in seven franchises.
- Careers in franchising have been started by 203,890 veterans.
- Veteran franchise owners, in comparison with other owners, are 30 percent more likely to hire other veterans.
- Sixty-five percent of franchisors have reported an increase in veteran recruitment into their companies throughout the previous year.
- A staggering 99 percent of franchisors have indicated that veterans are a good fit as employees.
VetFran recognizes and celebrates the qualities that returning military veterans bring to a business. Specifically, military personnel are trained to follow a Standard Operating Procedure (SOP), which, according to Franchising.com, is a “plan, system, or step-by-step method for how a mission or function will be carried out. Veterans understand the importance of following a plan to successfully execute a mission and capitalize on every opportunity.” It’s exactly this mindset and type of training that, together, make former military personnel ideally suited for following the procedures, systems, and plans designed to make a specific franchise business successful. There’s a sense of familiarity and confidence they can gain by knowing that a structure is in place and that to succeed, they need to adhere to the structure.
For any veterans or their spouses who choose to enter the world of franchising, brands that participate in the VetFran program offer different types of incentives in the form of financial assistance, supplementary training, mentorship, or additional discounts, in order to give veterans the greatest chances of success. We’ll examine these benefits more closely later on.
Before a veteran starts to narrow down their choices in regard to which brand might be the best fit for them, VetFran wants to ensure that each interested veteran and/or spouse understands the world of franchising, their options, and their resources completely. To this end, they have created a comprehensive VetFran Toolkit. This educational package has been designed to provide an in-depth look at the business of franchising. It includes:
- A Personality Profile assessment
- An “Introduction to Franchising” guidebook
- A workbook designed to help potential franchisees evaluate different opportunities
- The Federal Trade Commission’s buying guide for franchises
- A list of financial and small business resources specifically for veterans
- A comprehensive VetFran directory listing all the participating franchise brands
Incentives for Veterans
In 2014, veteran-owned franchises accounted for 14 percent of the world of franchising. It’s estimated that even more veterans would love to own their own businesses after returning to civilian life, but for many, the obstacle standing in their way is money: they do not feel like they have the financial resources to start their own ventures. Therefore, the IFA and other resources have worked together to make sure this obstacle is one that can be overcome, paving the way for more veterans to enter the franchising world.
Franchisor incentives can take a variety of different forms, including:
- Franchise fee discounts (generally, 10 to 20 percent)
- Startup cost discounts or discounts on inventory
- Royalty fee discounts
- Additional help for reservists (deferred costs or management assistance)
Furthermore, VetFran supports a program called IFA Member StreetShares, which has been described as “Shark Tank meets eBay for business loans.” In this format, veterans can participate in “an auction-based funding model where qualified retail and institutional investors review a business owner’s loan pitch and bid to back portions of the loan,” according to VetFran.
The U.S. Small Business Administration (SBA) recently launched their Patriot Express program, with the goal of making it easier for veterans to obtain financing for their small businesses, including franchises. One great thing about this program is that it’s not just for veterans, but also for reservists, National Guard members, and some active service military members, plus spouses and widowed spouses of those who have died in service. Loans offered through the Patriot Express program offer the lowest interest rates of all SBA loans, have lower credit score requirements, guarantee up to 85 percent of the loan, and can be used for startup costs and working capital for a franchise.
Additional assistance for veterans is being considered in form of the Help Veterans Own Franchises Act, a bill put before Congress in 2013 that currently has 45 co-sponsors. This bill would provide tax incentives for franchisors that offer a discounted franchise fee for veterans, and offer a tax credit for the veterans who purchase those franchises.
The Best Franchise Brands for Veterans
Each year, there are a variety of different rankings and lists released detailing the best franchise opportunities for veterans. These brands are the ones that offer some of the best overall financial incentives, training, assistance, and mentoring for veterans joining the brand. Whether it’s a list of the top 15, the top 42, the top 100 or a complete list of veteran franchise opportunities, the best news for a veteran exploring the world of franchising is that there are many different choices. These include a wide range of business types with a wide range of startup fees. Some are not location-specific, making them perfect for a member of the military who is still on active duty and planning their next move, or a spouse who needs flexibility due to relocations.
Interestingly enough, veterans who are successful franchisees don’t necessarily end up in industries that they have direct experience in, nor ones that match what they specialized in while enlisted. The most important factors are the business model and structure, followed by the concept offering. Often, the franchisee won’t be the one physically carrying out the service that they are providing, so success is all about executing the plan.
Top Five Franchise Industries for Veterans
Just a Few of the Top Brands
We do see some of the same brands appearing around the top of many different lists, including:
- 7-Eleven (convenience retailer) — 10 to 20 percent discount on franchise fee
- ACFN, the ATM Franchise Business (banking, financial services) — $1,000 franchise fee discount, no royalty fees
- Anytime Fitness (health and wellness) — 20 percent discount on franchise fee, discounts on multiple territories
- Budget Blinds (home décor) — $15,000 franchise fee discount
- Coverall (commercial cleaning service) — 10 percent discount on franchise fee
- CruiseOne (travel) — 20 percent discount on franchise fee, additional discounts for hiring former military personnel or spouses of active-duty military personnel, deferred costs and management assistance for reservists
- Cruise Planners (travel) — More than $3,000 in cash and marketing incentives
- HomeVestors (real estate) — 10 percent discount on franchise fees
- Jan-Pro (commercial cleaning services) —10 percent discount on franchise fees
- JDog Junk Removal (junk removal, veteran-owned, franchises only available to veterans)
- Snap-on Tools (retail automotive tools) — $20,000 startup discount (on initial inventory)
- Sport Clips Haircuts (beauty, wellness and grooming) — 20 percent franchise fee discount
- TSS Photography (art/photography) — $5,000 franchise fee discount, no royalty fees
- Two Men and a Truck International (moving) — 10 percent off franchise fee
- Visiting Angels (senior home care) — 10 percent discount on franchise fees
The above list is just a taste of the complete list of brands that offer some sort of incentive for honorably discharged veterans.
“Top Franchises for Veterans” lists are released each year from outlets such as G.I. Jobs, Military Times, Franchise Business Review, and others. A complete list of every franchise brand participating in the IFA’s VetFran program can be found on VetFran's website.
The Value of a Veteran
What we can conclude from all this is that veterans (and active-duty personnel who are planning their next move once their tour is up) historically have made successful franchise owners thanks to their discipline, their organizational skills, and their ability to follow an established program. They are agile in their thinking and can adjust to any change in their circumstances or situation. They will successfully motivate a team and persevere in order to succeed, no matter what difficulties they face. It’s for those reasons that franchise organizations are seeing the value in adding veteran franchisees to their brand and providing them with the incentives, assistance, mentorship, and training to ensure their continued success.
image 1: Veteran Employment via Dreamstime; image 2: Hand with pen and calculator via Dreamstime; image 3: 7-Eleven New York via Dreamstime