A franchise business is among the keenest opportunities for personnel exiting the military service in Central Texas. It offers the advantages of self-employment while receiving training, support and structure from people extensive experience, often on a national level.
Some business authorities recommend franchising as a training school for anyone intending to strike out in business independently. It’s an even more ideal business model for people with maturity, capital, good credit, and the ability and willingness to “go by the book.” Those qualifications are a good fit for military veterans, particularly retirees, who frequently possess those traits.
Consequently, both government agencies and business resource groups offer former military personnel incentives to start franchise businesses.
It’s difficult to find numbers or track growth in franchising in any community. For example, the International Franchise Association, an umbrella group, has no local chapters, and city records do not include information that would identify new businesses as franchises; they simply show up as new businesses.
According to Golda Eldridge, a retired Air Force lieutenant colonel and business consultant with the Small Business Development Center at McLennan Community College in Waco, more and more franchises are small, and sometimes home-based and mobile, like cleaning and computer services.
“The trend is growing nationwide,” Eldridge said, “particularly in service industries. I talk to exiting soldiers at Fort Hood once a month, and about 10 percent express interest in these opportunities.”
He mentioned that Curves fitness centers are among the fastest-growing franchises, and the Waco-based Dwyer Group, which began the Veterans Transition Franchise Initiative (”VetFran”), is very active, with seven of its own franchisor businesses. Through Dwyer’s leadership, about 250 more of the 1,200 IFA members have entered into an agreement to encourage franchising by veterans. The Dwyer Group’s businesses are mostly in building trades and appliances.
There are other forms of assistance. The U.S. Small Business Administration expedites loans for veterans opening franchises.
The late Don Dwyer convinced the IFA to start the VetFran program 10 years ago. It was dormant for awhile after Dwyer’s death, but was re-invigorated by his daughter, Dina Dwyer-Owens, now chair of VetFran and president and chief executive officer of the Dwyer Group.
Participating companies set their own requirements but promise to give veterans the best deal they can.
Another business arrangement that has gained popularity in recent years is licensing, frequently advertised as “business opportunities,” which Eldridge typified as work-at-home plans.
“In that, you’re buying a business concept, and then you’re on your own,” he said. “Most of these deals are a little on the shady side. They’re not regulated as strongly by the Federal Trade Commission.”
The practice is starting to be used, however, by some businesses with physical locations and highly visible interstate presences.
Central Texas Business Resource Center director Marcus Carr said the principal difference is that a licensee assumes more financial risk than a franchisee.
Companies that franchise charge an initial fee, which may range from a few thousand to a few million dollars, depending on the type and size of the business, and a royalty amounting to 6 to 8 percent of the gross revenues annually goes to the franchisor for between five and 20 years. All parties sign a “uniform franchising offer circular,” which enumerates what’s expected of all parties and defines financing arrangements.
“These papers cover everything that federal and state regulators consider important,” Eldridge said, “and potential franchisees are well-advised to consult attorneys who specialize in franchises.” Local and state bar associations can supply their names.
Another initiative of the IFA is the Franchise Network Group (”FranNet”), whose principal for Austin and San Antonio is Scott Cronk, one of Carr’s resource people. Cronk advises, “Don’t go for what’s hot in the market right now. The best choice for you is what gives you the most of what you want.”
Dwyer-Owens said the 700th veteran that VetFran has helped into franchising will be announced at the annual IFA convention this week in Washington, D.C.
“Franchising is growing by leaps and bounds,” she said, “The Dwyer Group’s business continues to grow in the double digits, and we expect this trend to continue indefinitely.”
Dwyer-Owens advised anyone interested to visit the IFA’s website, Franchise.org; veterans can go to the VetFran link for an exhaustive store of information.