Franchising World May 2012
By: Thomas Coba
Military veterans make great business owners, especially franchise businesses. As a franchisor, veterans are prized for all of the reasons one would expect: they are typically organized, self-motivated, ethical, focused and good with people. They also tend to be attracted to franchise business opportunities because franchises are structured and system-oriented, which military veterans are accustomed to.
Veterans and franchisors would seem to be a marriage made in heaven, but finding and recruiting qualified veterans for franchise businesses is not that easy. For veterans and franchisors, there is an obstacle course of issues that must be overcome to bring the two groups together. It’s a challenge for both, but certainly not insurmountable. By identifying the issues, franchisors and veterans can bridge the gap and help ex-military personnel grab their share of the American Dream.
Most military veterans leave the service with a wealth of useful experience. It may be technical experience in a specific area such as communications or logistics or it could be academic skills, leadership training or some other skill set. However, it is unlikely that the veteran has any experience in running a business.
Any business owner knows that he needs to know how to write a business plan, have some knowledge of accounting and have at least some experience with staffing and personnel to run a small business. People also need the specific technical skills required for that specific business, such as operating and maintaining equipment or preparing food. The good news for veterans is that most franchisors offer an intensive training course that provides many of the skills necessary for success.
In the case of ServiceMaster franchises (ServiceMaster Clean, Merry Maids, Furniture Medic and AmeriSpec), new franchisees come to the company’s headquarters in Memphis for a minimum of two weeks of training that includes both an overview of business best practices and the technical training required to perform specific job functions. The new franchisees also have access to additional training at regional and national meetings where they can attend seminars on a variety of business management and technical topics.
Also, many franchise operations are like fraternal groups. Individual franchisees enjoy friendly relationships with more experienced franchise owners who are not in competition and are willing to share their knowledge. These friendships are a great source of knowledge for the rookies who have never run a business.
Eligible veterans also can obtain education benefits through the GI Bill that will help pay for business classes in marketing, accounting, computer skills and other disciplines useful to the business owner.
Rarely does an enlisted person or officer retire from the military with a big savings account. Money often is a major hurdle preventing veterans from owning franchise businesses, especially franchises that charge significant sums of cash. Fortunately, there are methods for obtaining franchise fees and the operational money needed to get a new business up and running.
Some franchisors offer financing to qualified applicants. Franchisors that offer financing should promote this fact to veterans, as veterans may not consider themselves a candidate for a franchise business because they assume they don’t have access to enough money. Veterans also may take advantage of “Patriot Express” loans from the Small Business Administration. Patriot Express loans, which have the SBA’s lowest interest rates, can be used for start-up costs, equipment purchases and working capital.
The International Franchise Association is a great place for veterans to look for help and advice about franchise financing. In 1991, IFA began VetFran as a way to help veterans seeking to become small-business owners. VetFran has 460-plus participating franchisors that voluntarily offer incentives, discounts, fee waivers and creative finance products to help ex-military personnel get into business. More than 2,100 veterans have used the VetFran program to start businesses. IFA also promotes the hiring of veterans by the industry’s 825,000 franchised businesses, which support some 18 million jobs.
As part of the VetFran program, IFA recently announced an initiative called Operation Enduring Opportunity, a campaign in which participating franchisors have pledged to help recruit and hire 75,000 veterans and 5,000 wounded warriors by 2014. Congress has provided ample incentive for franchisors and franchise owners to participate with generous tax credits up to $9,600 for hiring a veteran.
VetFran also recently helped launch a new program in cooperation with Sprigster called Boost A Hero. Boost A Hero is an Internet-based program (www.sprigster.com) that facilitates “crowdfunding” for veterans who want to purchase a participating franchise business. Family, friends and supporters from across the country can make contributions to the veteran’s online effort. All of the donated money, except for a small processing fee, goes into an account for the veteran. The program is free to ex-military personnel, but the veteran is required to have a significant financial stake in the effort, as well.
Thousands of men and women are honorably discharged from the armed services each year. Franchise businesses are out there, available to these highly capable people, yet only a small percentage of veterans pursue or seriously consider owning a franchise business, often due to lack of information, or perhaps misinformation.
Like many civilians, there are many veterans who are simply unaware of the franchise business opportunities that are available. IFA lists more than 1,100 franchises, with more than 400 of them participating in the VetFran program. That’s a lot of opportunity that is largely untapped by veterans who are looking for a small business to run.
For franchisors, the challenge is getting franchise information to those who are transitioning to civilian life. Franchisors are not allowed to participate directly in the Transition Assistance Program, which is a joint effort by the Department of Defense, the Department of Labor and the Department of Veterans Affairs. However, in 2010, an organization called Veterans Franchise Centers was established to bridge the gap between franchisors and veterans looking for business opportunities. Veterans Franchise Centers facilitate the connection between franchisors and veterans and earn a commission when a veteran opens a franchised-based business.
Many veterans assume that the cost of owning a franchise is beyond their reach and, therefore, never seriously consider a franchise business opportunity. Certainly, there are franchise businesses that cost hundreds of thousands of dollars, but there also are franchises that are very affordable. A Furniture Medic franchise investment, for instance, starts at about $46,000. With the financial resources available to veterans, the cost is easily within reach.
Franchisors should also invest in advertising business opportunities to recent veterans. Magazine ads aimed at ex-military personnel are a good start, as is the Internet, especially the social media sites where companies can pinpoint veteran groups for messaging.
For franchisors, the investment in veterans is a good one. Veterans make great employees and excellent owners. ServiceMaster has hundreds of veterans as franchise owners and employees and always is eager for new recruits.
Military veterans are a perfect fit for franchise businesses. Most of the veterans come pre-equipped for success, with the maturity and determination every small-business owner needs. Success as a franchisor depends on the quality of the people who own and run your franchises. Franchise companies can never go wrong seeking military veterans to be part of its army of owners.
Thomas Coba is president of ServiceMaster Franchise Brands. Coba is responsible for 6,375 franchises and international licenses in 33 countries, 82 branches and 31,000 team members operating under the ServiceMaster Clean, Merry Maids, AmeriSpec and Furniture Medic brands. These brands hold market-leading positions in residential and commercial cleaning, disaster restoration, home inspections and furniture repair, respectively. He can be reached at 901-597-1400 or firstname.lastname@example.org.