If you're a veteran of the U.S. military, you can achieve your dream of business ownership with a veterans franchise. The veterans franchise industry includes many types of businesses and services across a wide range of initial investment levels. These organizations recognize the valuable contributions of U.S. veterans by offering discounted startup fees to military personnel in order to facilitate franchise ownership. With options across all consumer and commercial industries, you can pursue a franchise that utilizes knowledge you learned during your military experience or pursue new skills you can develop with franchisor training. When coupled with financial incentives for veteran-owned businesses, you can optimize your military experience while pursuing a new adventure as the owner of a veterans franchise.
Veterans who own their own businesses make a significant contribution to the U.S. economy. According to data compiled from the most recent U.S. Census Bureau's Survey of Business Owners (SBO), veteran-owned businesses, including franchises, total 2.52 million, representing 9.1 percent of all U.S. enterprises. Together, all veteran-owned businesses account for about $1.14 trillion in annual sales, according to the report.
In pursuing business opportunities, many veterans have matched their professional and personal goals with ownership of veterans franchises. U.S. veterans own about 14 percent, or one out of every seven, franchises in the United States, according to the International Franchise Association (IFA), the industry's largest trade group. While veterans franchises are available in all franchise segments, data from the Survey of Business Owners identified the highest number of veteran-owned franchises in the accommodations and food services industry. This segment represents about 15 percent of all franchises owned by veterans.
Franchise ownership is an opportunity for veterans to build upon the experience and skills they acquired during their military service. In addition, having military experience may give veterans an advantage in succeeding within the guidelines of a franchise business model, according to Entrepreneur magazine. While franchisees own their individual businesses, they have an obligation to follow the guidelines of the franchise organization without the freedom to act autonomously. In fact, franchisors rely on their franchisees to follow an established business plan that maintains the uniform products and services that franchise customers expect. The ability of veterans to succeed within a structured system may contribute to the fact that veteran-owned franchises have a higher success rate than that demonstrated by all types of veteran-owned businesses, according to a study by Pricewaterhousecoopers.
Veterans can find support in obtaining and growing a successful franchise through programs sponsored by the U.S. government, the franchise industry and individual organizations. To start, veterans can access incentives that facilitate franchise ownership and reduce some of the financial barriers that can interfere with establishing a profitable business. For example, the 650 franchise members of VetFran offer a minimum 10 percent discount on franchise fees for veterans and their spouses. Other franchises offer similar discounts. This savings can reduce the need for initial capital as veterans accumulate the resources necessary to open their businesses.
Veterans also can take advantage of government-sponsored perks like reduced fees for loans guaranteed by the U.S. Small Business Administration. These loans include capital that can be used for business startup, improvement and expansion. Benefits extend to businesses with veteran ownership at 51 percent or more. They include:
Elimination of upfront fees for SBA 7(a) loans of $125,000 or less and 50% reduction of those fees on 7(a) loans valued between $125,001 and $350,000
Fees waived for fast-turnaround SBA Express loans up to $350,000, according to the Veteran's Entrepreneurship Act of 2015
Eligibility for Military Reservist Economic Injury Disaster Loan (MREIDL), a loan that provides working capital to a veteran-owned business so that the business can continue to meet its obligations when the principal owner is called up for military service
As an investment option, veterans franchises, along with the general franchise industry, are positioned for growth. Rising incomes, low unemployment rates and reduced corporate taxes combine to support long-term increases for franchises in all industries, according to data prepared by IHS Markit Economics for IFA. IHS analysts predicted that the franchise industry would grow by 1.9 percent to 759,000 locations in 2018, up from 1.6 percent in 2017. According to the report, the gross domestic product (GDP) of the franchise sector was likely to increase by 6.1% to $451 billion in 2018, exceeding the growth rate of the U.S. GDP, which was projected at 4.7 percent for that year.
Veterans franchises are available in virtually all market sectors. They are identified by the unique financial incentives and support they offer to members of the U.S. military and their spouses. Choosing the right veterans franchise depends on your personal goals, preferences and financial resources.
You may find that owning a veterans franchise is an opportunity to pursue your hobby or passion in areas including food, pet services or sports and recreation in a new post-military career. Or, you can build upon your military-related expertise with a veterans franchise in education, computer/Internet services or security and alarms. While some franchises require specialized skills or licenses to provide services, most can be operated by owner/managers who hire employees with the appropriate credentials. Veterans franchises exist in all types of business models, including:
Automotive and Mechanical Franchises: Franchises such as Maaco auto repair, Sears Handyman Solutions and Mr. Appliance repair services are veterans franchises in which you can make use of mechanical skills you acquired during your military service. While franchisors typically provide owners with franchise training, having a mechanical background may be beneficial in handling day-to-day operations in these industries where qualified service providers always are in demand.
Health and Fitness Franchises: Franchises such as Title Boxing Club and Pro Martial Arts Karate allow you to maximize the physical fitness training you experienced during military service. Industry trends toward intense, boot camp style workouts can be a good fit for veterans who excel in leading and motivating people to achieve measurable goals. According to the U.S. Centers for Disease Control and Prevention (CDC), over 70 percent of U.S. adults over age 20 are considered overweight or obese, representing a significant potential market for franchise clients.
Home-Based Franchises: Franchises such as Expedia CruiseShipCenters travel planning and ClaimTek medical billing are veterans franchises that can be operated exclusively from home offices. Many home-based businesses require little more than a reliable computer on which you can operate proprietary franchise software. As a result, home-based franchises can offer lucrative opportunities to owners who prefer to work at home, including veterans with mobility limitations or those who need to combine work with family caregiving responsibilities.
Low Cost Franchises: Franchises such as Novus Glass windshield repair and Pillar to Post home inspectors are examples of franchises that can be started with relatively lower startup investments and maintained with minimal costs. As a result, franchises in this category are good choices for first-time investors who don't have the collateral or credit history to secure larger business loans. According to The Wall Street Journal, franchisees typically pay about 20 percent of initial expenses from personal funds, which can be easier to do with a low cost franchise.
Senior Care: Franchises such as Accessible Home Health Care and Home Helpers Home Care offer opportunities for veterans to continue a community service-oriented career while joining an industry with increasing demand. In the five years leading to 2015, the in-home senior care franchise industry grew at a rate of 12.6 percent annually, according to IBISWorld, a market research firm. Factors including an expanding senior population and growing societal preference for aging in place are expected to increase the need for qualified home care providers.
As a U.S. veteran, you may qualify for incentives or discounts that can reduce your initial financial obligations and result in ongoing savings during the life of your franchise. In addition to reduced franchise fees, you may be eligible for discounted or waived application fees related to SBA-guaranteed loans. Private lenders also may offer their own discounts or federally funded incentives to veteran-owned businesses. Ongoing veterans discounts from suppliers and service providers also can help you save on business expenses ranging from franchise inventory to equipment maintenance.
Since veterans franchises are available in virtually every industry, opportunities exist at all investment levels. Home-based franchises often are accessible for the lowest startup costs since you don't have to maintain a physical location. However, proprietary equipment, service trucks and rental of storage space can increase your expenses. Franchises that require a physical commercial location may have initial costs that can increase up to hundreds of thousands of dollars when you begin adding fees for property lease or purchase, equipment, utilities, maintenance and staffing.
In addition to an introductory franchise fee, all types of veterans franchises require lifetime payments related to revenue royalties. You'll also have to plan for ongoing costs related to marketing/advertising as well as employee training, salaries and benefits. However, the financial perks of franchising can help to minimize some costs and provide financial benefits you may not be able to access on your own. These advantages apply to franchises across all industries:
Favorable financing opportunities based on having a proven business plan
Franchisor recommendations to lenders who offer favorable terms to veteran franchisees
Franchisor-backed financing for capital costs related to franchise setup
Franchise group discounts for inventory, equipment and professional services
By owning a veterans franchise, you'll benefit from having a proven business plan to guide you through setup and execution of your franchise concept. As a veteran, you'll likely be comfortable with the franchise business model since its success demands adherence to a well-prepared strategy, much like the military experience. Following the franchise business plan will ensure that you benefit from your franchisor's expertise without wasting time and money on decisions based on trial and error.
If your franchise has name recognition, you'll also gain from the company's established reputation to attract past customers as well as new customers seeking your specific service or product. Even if your business isn't a household name, a new business associated with a franchise has inherent reputability versus one in which you have to build your own reputation from the ground up. In addition, if your business services local clients, you'll have the advantage of a geographically defined territory, ensuring that you have exclusive franchise coverage in specific markets.
As a franchisee in virtually any veterans franchise, you can expect to have access to a corporate franchise team. These professionals will ensure that you receive expert direction in establishing and managing your franchise. Your franchise team typically can provide guidance and advice in:
Identifying an appropriate physical space for your franchise
Executing franchise practices in day-to-day operations
Providing franchise education and ongoing industry training
Implementing a marketing plan for targeting and securing customers
Resolving franchise-specific problems and challenges
Connecting to franchisees in your franchise network for mutual support
As the owner of a veterans franchise, you'll have the same challenges inherent in all types of franchises. While a franchise offers the backing and experience of a successful organization, you'll have to contribute a significant amount of time and effort to ensure that your new business venture makes the best use of that support. In addition, if you're a first-time franchisee, you'll have to become familiar with the practical applications of business management within the franchise plan.
Having realistic expectations and learning how to utilize the assistance of your personal and professional support systems will be key to the success of your veterans franchise. In addition to your franchisor, you'll have access to veteran-specific programs that can support you as you resume civilian life while conquering new business ownership. For example, the SBA's Boots to Business program is an entrepreneurial training program for veterans and their dependents that teaches the skills necessary to succeed in business ownership.
While your business will benefit from being associated with a franchise in attracting initial clients, your location's performance will determine if first-time customers return to provide long-term revenue. It's important that you work to protect the integrity of your franchise location to ensure your business's success even if a fellow franchisee falters in their services. By encouraging clients to share their positive experiences, you can help establish your location's unique reputation and drive potential customers to your business. According to a Nielsen survey, 92 percent of consumers trust referrals from people they know. In addition, people are four times more likely to make a purchase based on a friend's referral.
Depending on the type of veterans franchise you own, you also may have to address specific challenges including:
Ensuring that you and your employees remain current with the newest technology and industry standards
Maintaining a committed and customer-oriented staff in industries where workers are in short supply
Establishing safety standards to avoid injuries to employees and customers
Keeping abreast of offerings from local and online competitors
Characteristics for Success: Who Should Consider a Veterans Franchise?
If you want to pursue a veterans franchise, you're sure to find a business that aligns with your personal interests and level of investment. While franchise education and direction can position you for success in virtually any industry, having technical experience or a personal interest in your franchise field may make your work more enjoyable and ultimately, more successful. A customer service mindset and astute business management, along with a willingness to follow franchise guidelines, are key for ownership of any veterans franchise. It's also beneficial if:
You have first-hand knowledge or some formal training related to the products or services your franchise provides. This can come via personal expertise or franchise education. Even if you're an absentee franchise owner, understanding the technical and operational aspects of your franchise commodity will help you effectively manage problems or complaints as they arise.
You can work comfortably within your franchise guidelines. In addition to financial obligations, you'll be held accountable to your franchisor for maintaining the franchise brand. Depending on your franchise agreement, this can impact decisions related to your franchise location, marketing, customer relations and target markets.
You have an education or experience in general business, marketing or sales. Whether you pursue a veterans franchise that sells fast food or provides home care, you'll have to work to maintain profitability within the franchise guidelines, while also identifying and correcting issues that interfere with the growth and success of your franchise.
You can prioritize customer service. Your success in a veterans franchise will depend on your ability to make customer service a priority in all aspects of your business. Keeping customers happy can increase repeat business, referrals and social media recommendations, all of which are invaluable to the profitability of a business in any industry.
You can identify and retain employees who can execute the franchise plan. While the market for employees can be competitive in some franchise industries, it's up to you to create a work environment that attracts the type of people who have the skills your business needs to succeed.
