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Finding Your Professional Niche After Active Service:
An In-Depth Look at Franchising as a Career Option
View this FREE report in interactive format with additional data and information above, or download the full report in PDF format.)
You’ve served your country. You’ve been a leader. You’ve had a defined role. When you come home, what are you going to do? Many people are asking themselves this question since over the next five years the Labor Department projects that 1.5 million service members will be leaving active duty.
“In the military, you have a clear career path and structured environment. When you transition out, you are suddenly faced with so many options,” says Home Instead Senior Care franchisee, Matt Lenart, who attended West Point and went in to the Army as an Infantry Officer.
If you would like to be your own boss, have structure, serve others, and leverage many of the skills you learned while in service, franchising may be for you. A franchise owner enjoys the benefits of being in business on his own, but with the support of an entire team dedicated to making sure he is successful. This support and team mentality is similar to what you experienced while serving.
Is investing in a franchise better than starting a business from scratch? The fact that franchising as an industry continues to outpace the broader economy as data from the International Franchise Association shows, means that for many people the answer is yes. The reason is that the chances of your business being successful may be greater with a franchise. Statistics from the Small Business Administration (SBA) show that the majority of all start-up businesses do not survive their first two years. This is attributed to the lack of expertise.
A good franchisor invests a tremendous amount of time and resources into keeping the overall brand, which includes your franchise, profitable. As part of your franchise purchase and royalty payments, you will enjoy most if not all of the following benefits:
Reduced Risk: A proven successful formula has already been established by the franchisor. There are also other franchisees who have paved the way. You can emulate what they are doing to achieve success.
Effective Systems: There are training systems, operating manuals, contracts, agreements, and other documentation and processes in place.
Support: The franchisor will help you to continually adjust, change and improve your business. Fellow franchisees are also available to assist you.
“I talk to my fellow franchisees a lot,” says Terry Bruns, who prior to purchasing a Two Men and a Truck franchise was an Electronics Technician in the U.S. Airforce. “I regularly analyze their numbers to identify businesses within the system that are doing well in areas where we are struggling and then approach the franchisees who own them for advice. This approach has enabled me to create a highly strategic road map for my business.”
Reduced Costs: Most franchisors negotiate lower prices by leveraging group buying power. This saves you and your customers money.
Marketing: The cost of your marketing is shared among all the franchisees in the system. You are also less likely to waste time or money on ineffective campaigns because the franchisor typically knows what works and what won’t. In addition, the franchisor will help you develop marketing plans and budgets specifically for your area.
“We provide new franchisees with a comprehensive four-week training program consisting of one week inside a FASTSIGNS center, two weeks at our corporate training facility, and one week on-site,” says Catherine Monson, CEO of FASTSIGNS International, Inc. “Each franchisee also has a dedicated Business Consultant to assist with business operations and a Marketing Services Manager to help with marketing planning and sales targeting for the new center. In addition, we help them with their site selection, lease negotiation, space planning, and build-out process.”
One in seven franchises—more than 66,000—in the U.S. is owned by a veteran, according to VetFran, a program founded to provide access and opportunities in franchising to veterans and their spouses. Franchises appeal to people from a variety of backgrounds as illustrated by our research, which found when looking at veteran franchisees who have owned their franchise for less than two years, that there is a higher percentage of women and ethnic minorities who own them compared to the non-veteran franchisees we surveyed.
FRANCHISORS WANT YOU
Franchising, in many ways, may be an ideal career path for veterans. Franchise owners who are self-motivated, driven, highly trainable, thrive within a team environment, and understand the value of following detailed systems, tend to succeed. Military service cultivates these traits.
The franchisors we interviewed for this report cited that veterans have many characteristics they like candidates to have including:
Leadership: Military training teaches how to function in stressful situations and leadership skills. In franchising, you have to make snap decisions and be a leader while following an established system. You’ll be responsible for day-to-day operations; hiring, training and managing staff; and leading your team to success.
“I’m in total control of my success. This sounds horrible, but I eat what I kill and if I don’t get up every day and try to better myself and my team we are going to be surpassed by our competitors. I love inspiring and motivating my team!” says Gus Grizzard, who served in the 82nd Airbourne Division out of Fort Bragg for three years and is the owner of ERA Grizzard Real Estate, an ERA Real Estate franchise.
“If you’ve successfully led a team in the military, you can successfully lead a team in business,” says Lenart of Home Instead Senior Care. “You understand intent and getting the job done.”
Teamwork: While in service, you worked as part of and relied on a team. As a franchise owner, you’ll receive support from the corporate team and fellow franchisees as well as your own employees.
“As a franchisee of ERA Real Estate, I have people in the corporate office who are a lot smarter than me looking down the road for pot holes or obstacles that might be problems and proactively addressing them, something I don’t have time to do,” says Grizzard.
Familiarity With Systems: You are familiar and experienced when it comes to procedural execution and working within a system thanks to your military training.
The ability to work within a system and execute established procedures is what makes franchisees successful.
“Franchisees who follow our systems are far more successful than those who deviate from them,” says Paul Pickett, VP of Franchise Development at Wild Birds Unlimited. “Our franchisees are first introduced to our systems via an intense five-day in-classroom and five day in-store training program. Upon completing their initial training, they receive ongoing one-on-one support during their first year from our New Owner Coach Team, which includes our Media and PR Manager, two New Owner Business Coaches, our Training Manager, and our Nature and Hobby Manager. When they graduate from our New Owner program, they can elect to participate in one of three programs, which offer different models of support, the two most advanced being Enterprise and Business Development. Each helps them set and meet business objectives.”
Self-discipline: While serving, you learned self-discipline. It’s a valuable trait when it comes to strategically leading your business to success. There will be ups and downs in business and you need the grit to stick it out in order to achieve your goals.
“We find that our veteran franchisees have the commitment and resilience required to be successful,” says Pickett.
“The mission first mentality you learn while serving helps you grind it out,” says Lenart of Home Instead Senior Care.
Bill Erickson, Executive Vice President of National Property Inspections (NPI) echoes the above when he says, “Our motto is ‘Integrity, Honesty and Professionalism’. We actively recruit veterans because they typically have each of these traits. In addition, we appreciate their can do attitude, self confidence, and willingness to follow direction.”
HOW MUCH DO FRANCHISES COST AND HOW CAN YOU AFFORD ONE?
Regarding financing your franchise, many franchises participate in the VetFran program, which provides veterans with financial discounts. Most franchises also facilitate third party financing. 401K rollovers’ tax advantages make them a popular option. SBA backed loans can be an ideal way to defer some risk. SBA pre-approved franchises often have shorter loan approval times. You may also take out a home equity loan, a bank loan, or borrow from family or friends. Our Franchise Buyer’s Toolkit, which is available at www.FranchiseBusinessReview.com/Toolkit, provides a detailed franchise funding walkthrough as well as other tools that will help you successfully navigate a franchise purchase. We also offer a full suite of financing services to ensure you get the capital you need at www. fbr50.com/franchise-financing-options/.
“FASTSIGNS is the only franchise in its industry to offer a 50 percent franchise fee discount to any veteran, without stipulations,” says Monson. “Veterans also benefit from reduced royalties for the first 12 months.” In addition to its veterans program, FASTSIGNS has $21 million in funding available for qualified franchise candidates through partnerships with Benetrends and Franchise America Finance.
“I took out a home equity loan to buy my franchise,” says Two Men and a Truck franchisee Bruns. “For my wife the experience was scary. I felt calm and confident that we were doing the right thing.”
It’s important to understand exactly what a company’s franchise fee includes in order to avoid any unexpected expenses.
“Our franchise fee includes almost everything a franchisee needs to get their business operating,” says Erickson of NPI. “They receive a computer tablet, proprietary software, most of their hotel and meal costs during training, training tuition, web site set-up, and several months worth of marketing material.” Approximately 15% to 20% of NPI’s franchisees are veterans. The franchise offers them 15% off their franchisee fee.
When budgeting to purchase a franchise, it’s crucial to work in a financial safety net that will enable you and your business to have breathing room. You must have enough funds to get through the break-even period, the time when every dollar that comes in to your business is immediately absorbed by it. You do not ever want to be at a point where you have to choose between paying the mortgage on your home or keeping your business afloat.
“We opened in November 2014, but did not have a client until mid-January,” says Lenart of Home Instead Senior Care. “It took us until the fourth month mark to turn the corner regarding revenue and we’ve continued to grow from there.” Lenart takes a salary and employs two full time staff members—an administrative assistant and General Manager. He also hired a part time marketing representative. “Having a GM and marketing rep enables me to stay above the trench vs. fighting in it. I’m able to focus on applying my tactical planning training to growing the operation, ensuring high quality client care, and hiring caregivers.”
In some cases clients come in almost as soon as you open the doors of a franchise.
“It’s been a really good ride. We had our first client just two or three days after opening in June 2012,” says Bruns of Two Men and a Truck. “Within seven months we did 368 moves. I project we’ll do a little over 2,000 by the end of the year.” Just seven months from opening day, Bruns reports his gross revenue was $180,000. His projected 2015 revenue is $1.2 million.
If you will be actively engaged in the military for several more years, now is a perfect time to prepare for your future. If owning a franchise interests you, start investigating your options and saving to invest in one. If you will be leaving the military within a year’s time or have already left and decided franchising is for you, you may feel under pressure to dive into it. Don’t! It’s crucial to take the time needed to thoroughly research each opportunity that interests you. The following advice regarding how to best approach your search for a franchise that will meet your personal and financial objectives will help prevent you from marching into a potentially bad business investment.
Get intel from current franchisees
Franchise owners in the trenches will provide you with an honest perspective. Ask as many franchisees as possible about their experiences with systems you are interested in.
“Don’t just listen to franchise sales people. Do your own research and contact existing franchise members for input,” says ERA Real Estate franchisee Grizzard.
“When I was considering purchasing a Two Men and a Truck franchise, I randomly called about a dozen franchisees,” says Bruns. “Each was very frank with me. I felt confident that I knew what I was getting in to.”
A good source of franchisee satisfaction insight is www.FranchiseBusinessReview.com where many brands share the complete results of their franchisee satisfaction surveys.
Ensure the uniform fits
Although many veterans choose a franchise concept with which they have no experience, others select one that fits a particular skill set they acquired during active duty. For example, senior officers can apply their leadership skills to managing large teams, whereas someone who specialized in engine repair may apply their expertise to a related franchise concept such as automotive.
“When I left active duty, I worked in the corporate world for several years,” says Home Instead franchisee Lenart. “I found that I missed the deep sense of pride in serving the greater good that I had when I was in the military, which eventually led me to purchasing a Home Instead Senior Care franchise. I now feel that I am making a positive impact on the lives our clients and their families every day.” In addition to feeling good about serving others, Lenart likes the direction his franchise is going in. “We’ve grown every month. In September of this year we did $55,000 in gross revenue. I would like to reach $75,000 per month by the end of the year,” he says.
“Pick your franchise wisely. You’ll want to be sure you enjoy it,” says Bruns of Two Men and a Truck. “I really love my system. Our goals and values are aligned. My strengths are also logistics and sales, which I leverage daily in my business.”
Understand the lay of the land
The Franchise Disclosure Document (FDD) provides a tremendous amount of information about a franchise, but can be hundreds of pages long with potential mines buried in the fine print. It’s advisable to hire a franchise lawyer to help you understand it. An in-depth breakdown of the FDD is presented as on- demand video segments within our Franchise Buyer’s Toolkit, which is available at www.FranchiseBusinessReview.com/Toolkit.
Many franchises make it possible for you to conduct your due diligence from afar.
“Our development team Skypes with candidates and we help them line up interviews with existing franchisees,” says Pickett of Wild Birds Unlimited. “In addition we share our full Franchise Business Review franchisee satisfaction survey results with them as well as YouTube videos of our franchisees so that they can have a great understanding of how our franchisees feel. We also send them photos of what various locations look like and share our virtual brochure with them.” Wild Birds Unlimited offers veterans 15% off their franchise fee.
“We share an e-mailable version of our franchise package with prospective franchisees who are abroad and schedule after hour calls with them,” says Erickson of NPI. “The bulk of our communication takes place via e-mail.” For the 12-month period ending on April 30, 2015, NPI’s franchisees averaged $125,000 in gross income according to the firm’s earnings statement.
Look Before You Leap
Service, dedication, loyalty, and commitment are just a few of the stellar characteristics many veterans have. It’s important that before you invest in a franchise that you ensure it has the same characteristics. Conducting extensive due diligence, particularly research into how other veterans have fared in any system you are considering is essential. A great place to start is with the brands that made this report and others with very high franchisee satisfaction that are highlighted at www. FranchiseBusinessReview.com.