Veterans in Franchising: Your FAQs Answered
One out of seven franchise businesses are owned and operated by Veterans of the U.S. military. According to a study conducted for the International Franchise Association Educational Foundation, based on U.S. Census data, more than 66,000 Veteran-owned franchise businesses provide jobs directly for 815,000 Americans and generate more than $41 billion in GDP.
VetFran, an organization offering support and expertise in all matters related to franchising for Veterans, are here to answer some common questions you might have before beginning your franchising journey.
Why are Veterans so often suited and successful in franchising careers?
Veterans emerge from service with strong leadership skills and a thorough understanding of teams. Military experience includes leading and motivating people, improving processes, and accomplishing a defined mission. Like the military, successful franchisees and employees accomplish the mission with a team.
An established franchise business operates on proven systems and defined procedures. Executing systems and following procedures with precision is emphasized in military training and leads to success in franchising.
Franchises provide training. The military has extensive training and teaches very specific skills to be used to carry out very specific tasks. Franchises also have comprehensive training and support built into the franchising process. This means a Veteran is more likely to succeed by following the franchisor’s proven business model and completing the training program.
Franchises are also highly team orientated,
meaning you are part of a larger system that is focused on a collective mission greater than the individual. You’re in business “for” yourself, but not “by” yourself.
What should Veterans consider when exploring franchise opportunities?
Educate yourself on franchising and how being a franchisee is different than being a pure entrepreneur. Seek out other Veterans in the business you are interested in and ask questions about their experience.
Prioritize what is important to you and then seek a franchise opportunity that matches your priorities. Your priorities may be having passion for the product/ service, independence, aligning your values with the franchise system, financial rewards, etc.
Write down your overall objective and have goals that will help you achieve success. Consider different models (home-based vs. office-based, capital requirements, servicebased, etc.) to find franchises that will be a good fit.
Do extensive research to understand the history, the terms of agreement outlined in the Franchise Disclosure Document, and what is expected of the franchisor and as a franchisee.
What are the steps to take once a Veteran knows which business he/she wants to get into?
You would need to contact the franchisor directly to better understand what their process is for franchise ownership. Each franchise system has a process to complete before an agreement between the franchisor and prospective franchisee is realized. If you need a loan, then there would be a separate process for receiving a small business loan and the timeline varies. In some cases, the franchisor will have in-house financing available that can help streamline the process.
Typically, the steps for becoming a franchise business owner are as follows:
1. Introductory phone call – Normally there is an introductory call with the sale representative at the franchisor’s headquarters. The purpose of the call is to get an understanding of what the prospective franchisee’s goals are and to answer any preliminary questions about the franchise system.
2. Submit franchise application –The prospective franchisee will submit an application to see if they qualify based on the franchisor’s criteria.
3. Meeting in person – A representative will meet with you in your local market to discuss the franchise program and go over the Franchise Disclosure Document.
4. Discovery Day – This is a day to conduct formal meetings with the corporate headquarters and have a more detailed review of the Franchise Disclosure Document and business opportunity.
5. Create a Development Agreement – This agreement is typically where your territory of operation is defined and the timeline for execution and payment is discussed.
6. Select the location of business – In many cases the franchisor will assist you in finding a viable location for your business.
If a Veteran is considering opening a franchise, how should he/she evaluate the various companies before making a decision?
This all depends on your goals. Start by defining what you are passionate about and align your values with a business that has the same values. This could mean defining which business you see yourself running and would be happy operating in the longterm.
Narrow down this search by industry, business type, and investment level. When evaluating any franchise opportunity it is important to interview other franchisees within the franchise system, and to fully understand the Franchise Disclosure Document.
Some other aspects you may want to keep in mind when evaluating franchise businesses include:
• what is the required net worth and liquidity?
• what is the total startup capital needed?
• is the company a member of VetFran?
• what does the company offer Veterans?
• is the territory you wish to operate in available?
• how many years has the company been franchising?
• what are the terms and conditions outlined within the Franchise Disclosure Document?
To read more VetFran answers to frequently asked questions – like how long it takes to start planning a franchise venture; what typical start-up franchise fees and costs are involved; and where to go for loans and financial backing – visit the VetFran website here.
About VetFran
VetFran was founded in 1991 as a strategic initiative of the International Franchise Association. VetFran includes over 600 IFA member companies offering financial incentives, education and support to Veterans interested in franchise ownership and/or a career path in franchising.
VetFran was founded in an effort led by Chairman Don Dwyer, Sr. (USAF, Ret.), founder of The Dwyer Group, to support Veterans returning from the Gulf War transition to the civilian economy.
www.vetfran.org
“Start by defining what you are passionate about and align your values with a business that has the same values.”