Veterans’ natural leadership skills and self-motivation make them ideal entrepreneurs, and many are drawn to the structure and support systems that franchising offers. Veterans own one out of seven franchise businesses, accounting for over 66,000 franchises nationwide.
The Veterans Florida Virtual Expo’s franchising panel featured pros with experience buying and operating franchises and franchising their own companies. Here are their takeaways on how veterans can get started and excel.
Research Companies & Industries
Like any business endeavor, franchising starts with research both within industries and across them. As you narrow your search, be sure to read the Franchise Disclosure Document that franchisors are required to provide prospective owners. This includes their financial statements, franchise fees, investment estimates, and other obligations that you would have as a franchisee.
Good research goes beyond forms and numbers. “Talk to their most successful and least successful franchisees,” says Paul Huszar, U.S. Army Veteran and owner of VetCor Services The franchise owners can provide important information about the support they receive from the company and what you can expect when working with them.
Understand Revenue Models & What’s Required
As you’ll see in your research, franchise and royalty fees vary but according to Huszar, percentage of gross income is the most common but there are others such as flat fees. Some companies also require an annual contribution to marketing funds, and you can find all of that in the Franchise Disclosure Document. However, keep in mind that those costs are in exchange for the brand and support that the franchisers provide you as a business owner.
While franchising may be simpler than starting from scratch, it still brings many of the challenges and risks that other entrepreneurs face.
“It’s not plug and play. Don’t think you’re just going to buy this thing and the money is going to be rolling in. It’s work,” says Keith Jackson, franchise owner of i9 Sports and Signal 88 Security.
Huszar reiterated the need to factor royalties into your revenue projections so that you have enough runway to keep operating until you turn a profit.
Take Advantage of Resources
With data showing that veteran entrepreneurs outperform civilians, many companies specifically seek veterans for franchising. “They offer 10%, 20%, or even 30% off of that initial franchise fee to get veterans into the system,” said Matt Wiggins of VetFran, the national organization that assists veteran franchise owners. VetFran’s resources include a ranking of companies that offer veterans the best franchising deals, links to financing opportunities, and a comprehensive guide to franchising.
And remember that the help you receive from the company is what makes franchising so attractive. “You’re buying a brand, a reputation and a system and some support. So use it,” said Jackson.
Watch the Virtual Expo’s franchising panel here for more details and insights from our experts.