Monthly Archives: May 2015

Franchise Opportunities for Veterans

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Franchising can be the best solution for veterans.

Unemployment levels are higher among recent combat veterans than among the population as a whole — 10%, according to recent government figures. In some cases, analysts say, these vets are taking a well-deserved break before getting back into the civilian work world, but sometimes it’s just harder to get a job.

A job hunter whose resume lists skills and experience like “fighter pilot” or “operations officer” can leave human resources workers confused and unable to see where that job hunter would fit in the organizations. Many companies now do a first screening with an online application form, and these automatic systems may use algorithms that look for specific words. Without those terms, a resume or application form may never be seen by a human being.

That’s just one reason that a franchise can be the perfect career choice for a veteran.

Veterans often make great franchisees because they have been trained to follow systems with a high level of responsibility and initiative. While people who choose to open a franchise because they want to be their own bosses may chafe at having to follow someone else’s plan, veterans are used to following systems. They’re also used to being in command, and have the discipline and work ethic to succeed on their own.

Specific programs designed to support veterans are in place. Boots to Business, an entrepreneurship training program from the Small Business Administration, gives vets an overview of the skills they need to get into business for themselves, including franchise businesses.

VetFran, part of the Veterans Transition Franchise Initiative, consists of more than 650 companies offering special support for veterans. Founded in 1991 by Don Dwyer and later gaining support from the IFA and from the White House’s Joining Forces program, VetFran provides training and resources for veterans seeking to start a franchise business.

The companies that take part in VetFran choose their own ways to support veterans. Some examples of VetFran offerings;

  • 7-11 gives a 20% discount on start up costs.
  • Batteries Plus Bulbs has a special program, Ownership with Honor, which funds almost 85% of total start up costs.
  • Little Caesar’s has a veterans program providing discounts and credits of as much as $68,000.
  • AAMCO Transmissions gives an $8,000 discount to vets.
  • CruiseOne offers financing and a 20% discount on the franchise fee.
  • Abrakadoodle helps vets find financing.
  • FreshCoat gives vets a $2,000 discount.

Discounts and financing help are the most common kinds of support offered by VetFran corporate partners.

Sprigster even has a crowdfunding tool for veteran franchisees. There aren’t many projects in place yet, but this could be a powerful resource for the right vet. Fill out an application form and you can seek funding from the crowd. The program is called “Boost a Here,” and it works the same way Kickstarter does.

So veterans have some strengths (and weaknesses) that align with franchising, and they also have access to some great resources and support. Many of these opportunities are available to the spouses of veterans, too.

Is franchising the right choice for you? Explore our Veterans section.

Franchise Success: Who’s Responsible?

success or failure

As you research franchise business opportunities, you have some specific questions in mind. Some may be unique to you, but nearly everyone wonders, “Will I succeed? Will I make money? How much will I make?”

Success and security are on your mind because you’re making an investment. You’re choosing how you will spend your time and earn your money for many years into the future. Franchise businesses — like independent start ups and most jobs — don’t offer a guarantee of success and security.

They offer you a chance to succeed.

Franchisees look into the success rates of franchises in general (higher than independent businesses) and they look into the success rates of specific franchisees. They talk with current franchisees who have succeeded and they try to determine whether a particular franchise will succeed in their market.

But when you get right down to it, you — the franchisee — have the most control over your success, because you are responsible for the most aspects of your franchise’s success:

  • You’re responsible for deciding whether franchising is right for you. If you like to do things your way and have trouble following rules, it probably isn’t. If you appreciate the chance to shine within a system, you’ll probably find franchising satisfying.
  • You’re responsible for doing the research needed to make the right choices. Too many franchisees pick a franchise because they loved it as a customer. Being a customer is not the same as being a franchisee.
  • You’re responsible for making the right choice among franchise opportunities. Franchise businesses are not all alike.
  • You’re responsible for making sure you have the resources you need to succeed. Underfunded franchises can have a hard time making it through the start up phase. If you can’t commit the time and attention, you may not be making the right choice.
  • You’re responsible for following the franchise system. Many franchises would be successful if they did what their franchisor expects them to do.
  • You’re responsible for putting in the time and money to get started. Talk with current franchisees and find out what they put into their franchises. Don’t imagine that you’ll be able to do it with less time and a smaller investment. You’ll have to do a lot of training, marketing, and otherwise setting up before you hang out your “Open” sign.
  • You’re responsible for hiring the right people. Unless you choose a franchise with no employees, you’ll have to make good choices when you hire, and manage your people once you’re hired them.
  • You’re responsible for capturing and using the numbers needed to keep your franchise on track toward success. Franchising is not a mechanical toy you can wind up and watch. You’ll have to stay on top of operations.
  • You’re responsible for making the day to day decisions that help you reach your goals. Some questions are not answered in the handbook. You must be prepared to make some calls.
  • You’re responsible for being aware of and responding to the changes in your market or your industry that will keep your franchise successful. Times change. Even the most perfect system must respond to market realities and changes in consumer behavior.
  • You’re responsible for working well with your franchisor. Franchises are a distribution system. Working well with your franchisor is a must.
  • You’re responsible for getting the most out of the franchisee community. Many franchises have strong communities of franchisees who support one another. It’s up to you to join in.

Who’s responsible for your success as a franchisee? Fortunately, you are.

Why Do You Want to Buy a Franchise?

Why do you want to buy a franchise? What are your goals?

A surprising number of people don’t have a particular goal. They want to “try it out” or they’ve always dreamed of owning a business or they want to be their own boss. But a new book, Secrets of Franchise Success: The Formula for Becoming and Staying a Top Producing Franchisee by Marc Camras and Melissa Hart Woods, found that the most successful franchisees had something different in mind.

The authors interviewed scads of franchisees. They found that the most common reasons people wanted to own a franchise were their unhappiness in their 9-5 jobs and their desire to be their own bosses.

But when they looked at the goals the top performing franchisees in the group had for their lives and work, they saw something completely different. These franchisees had much bigger goals. They wanted to be the top franchisee in their field. They wanted to own multiple locations. They had five year plans for earning back their investment and specific numbers they wanted to reach in their revenue, their income, and their lives.

What’s more, the franchisees who had big, bold goals approached their work differently. They were more likely to work on their business, as the saying goes, than in it. They followed the franchise system, but they always kept their own goals in mind.

They didn’t approach their businesses as if they were employees. They took responsibility for their outcomes and moved deliberately toward those goals.

But the big ideas are the first step. What is your big, bold goal for your franchise business? Take a minute and write it down.

If you had trouble doing that, it might be for one of these reasons:

  • You’re actually looking to buy yourself a job. You want to enjoy your work and have some control over it, but you’re buying a business where you can be a happy worker, not a highly successful business owner. That’s okay, but it can mean that you end up working for a tyrant. Without bigger goals to fire growth, you can easily find yourself working without vacations at a pay scale you wouldn’t have accepted when you were an employee. If this sounds like you, you might want to partner with someone who will keep your business on track to reach a bigger goal.
  • You’re afraid to jinx your success. Do you think that setting a high goal might mystically lower your chances of reaching that goal? Think about that for a minute. How would that work, exactly? If you think about it, you’ll see that this is not a rational idea. Go ahead and set yourself a challenging but not impossible goal.
  • You don’t want anyone to see you fail. After all, if you say that you want to make your first shop profitable within five years and then open two more shops, how embarrassing will it be if you’re not profitable in five years? Go ahead, imagine it. Your buddies will come up to you and say, “Hey, I thought you were going to own three shops?” No? Probably not.

Your goals can be changed and revised… and they don’t have to be shared. But the actions you take if you plan big will be actions that move you toward a bigger goal than if you plan small.

Write down some big goals, and figure out what you’ll have to do today to move toward those goals.

Then do it.

Union Steps Up Franchise Efforts

2011_Wisconsin_SEIU_protestersThe Service Employees International Union has been agitating for increased wages for service workers, with a focus on fast food workers. Since so many fast food restaurants are franchises, the SEIU has been engaged with franchise businesses along the way. McDonald’s has been their primary target, though 14 different franchises were named in a petition filed by the union with the FTC.

Recently, the SEIU has reached out to franchisees.

This is a change of approach for the union, which has previously worked directly with employees. However, as they’ve discovered that many franchisees are simply not in a financial position to meet their demands, and franchisors are firm about their inability to force franchisees to rage wages, they’re taking a new tack. If they can get franchisees to join them in their push to involve franchisors in the wage issue, they may have more success.

Therefore, they have filed a petition with the Federal Trade Commission asking for an investigation of “abusive practises” by franchisors.

Instead of accusing franchisees of exploiting their workers as the union has done in the past, SEIU is now claiming that the franchisors are “abusive and predatory” toward their franchisees. The object is to align franchisees and their workers against the franchisors.

One place where this is working is in Puerto Rico, where there is a history of tension between the franchisees and Arcos Dorados, the largest franchisee in the McDonald’s system. Arcos Dorados has control over the individual franchisees in Latin America and the Caribbean, amounting to more than 2,000 franchises with 90,000 employees. Disgruntled franchisees sued in 2007 and filed a complaint with the FTC last year, but have had no redress for their complaints.

This group of McDonald’s franchisees may be ripe to listen to the SEIU, and two joined in a conference call to publicize the petition. Other franchisees on the call included one of the group of 7-11 franchisees who sued the franchisor last year for discrimination, and a former McDonald’s franchisee who lost her franchise.

During the call, SEIU spokesperson Scott Courtney said that the franchise system itself causes low wages. “Franchisers like McDonald’s control virtually every aspect of the business operation at their franchise stores. They set the cost and effectively set the low wages paid throughout the industry,” he said. “Reform of the system is important to ending poverty wages in the franchised food sector.”

However, the SEIU has not been entirely successful in their efforts to get franchisees and their workers together. McDonald’s spokeswoman Lisa McComb was quoted as saying, “It’s ironic that this organization, that has spent more than $80 million during the past two years to disrupt operations of these same businessmen and women, is now appealing to them for an alliance.”

The SEIU has said that franchisees should not have to pay for their employees’ wage hikes in their effort to bring franchisees to their side of the issue, but they have no specific details on how that would work, and their proposals so far have not had any clear benefit for franchisees.