Top Franchises for Veterans 2012

by Franchise Business Review

From this data, we identify our list of Top 100 Franchises for Veterans, which includes companies with above average satisfaction among the veteran franchisees we surveyed. 

Vets in Franchising
The same traits that make for a successful military career (the ability to follow directions, work in teams, and lead) can make for very successful franchisee. Franchisors told us that franchisees who have had successful military careers often outperform non-military franchisees.

"Franchisors offer a business model, operating systems, and procedures. We find that veterans are often better at following that system than those who haven’t had that kind of experience and training,” said Catherine Monson, CEO of FASTSIGNS. “When you open a new business, it’s going to be longer hours and harder work—than just having a job. Our folks who have served in the military are not afraid of hard work. That kind of perseverance and commitment is what it takes to own a business.”

FASTSIGNS offers 50% off the franchise fee ($34,500) for people who’ve been honorably discharged from the military.

Auto Appraisal Network, another franchise brand that excels in franchisee satisfaction among veterans, began making a special effort to recruit veterans three years into franchising. The franchisor offers 20% off its franchise fee, which ranges from $12,000 to $30,000, depending on the model. “I wanted to give a break to military guys because it costs me less to support them because they do the job right,” said founder Dave Williams.

“Our whole process is set up by the numbers—it’s 1, 2, 3, 1, 2, 3, and move on. Some of the non-military guys get the job done, but it’s more work because they just don’t have the experience following systems and structure,” he said.

Franchisors told us that veterans of all kinds—those who complete their service commitment and move on to civilian jobs and those with long military careers—are attractive franchise candidates. Snap-on Tools, however, is especially interested in veterans who made a career of the military by moving up through the ranks.

“A vet could be someone who was a private for 20 years or someone who joined from West Point as an officer or someone who has done many tours of duty,” said Barrie Young, president of sales and franchising at Snap-on. “People who have successfully served in the military and, through hard work and persistence, have elevated themselves and progressed through the system, are people who are likely goal-oriented, hold themselves to the standard operating procedures that the military has, and exhibit personal leadership.”

Snap-on offers honorably discharged veterans a $20,000 discount on their initial inventory purchase.

“People in business talk about teamwork, but people in the military have actually lived it, because, in times of danger, they depend entirely on the person beside them,” said Snap-on’s Young.

Many veterans—especially those who’ve had long, successful careers as officers in the military—have personality traits that carry over into business ownership. The franchisors we spoke with told us many vets who’ve held leadership positions in the military tend to have personality traits that go well with running a business. And, what some vets may lack in sales and marketing experience, they make up for in drive, says Ron Taylor, vice president of franchise development at Sandler Training.

“When talking to prospects, our franchisees need to be able to handle the word, ‘No.’ Some of our non-military franchisees come in and can’t take that, but military guys just don’t care. A ‘No’ doesn’t discourage them—they’re bulldozers, and they’ll just keep going,” Taylor said.

Sandler Training offers vets $5,000 off the $68,000 franchise fee and ongoing support through its mentor program.

“I have a vet who is a [sales] coach, and I pair him up with other veteran franchisees. He can tell them, ‘I’ve been there. Here’s how you use your strengths from the military to be a successful franchisee.’ Vets need to talk to someone who can empathize,” Taylor said.

The much-circulated image of vets in fatigues walking straight off the battlefield and into franchising isn’t exactly accurate based on our research. Forty-six percent of vets who entered franchising in the last two years are over the age of 45, while an additional twenty percent are 65 or older. This might be due in part to the investment required to buy a franchise. [Read more in Investment Levels.]

Although vets can be a great fit for franchising because they are used to following a set process and structure, it’s important to note that no franchise is as structured as the military. For veterans coming straight from active duty to franchising, there may be an adjustment period. As a franchisee, you will have decisions to make and you will have the freedom to make choices about your business. As Signal 88 franchisee Bill McCoy told us, it can be difficult to adjust to the freedom of civilian life while under the pressure of starting and running a new business.

“As an infantry soldier in the Army in a combat zone, I am extremely well-adept at handling any situation that the enemy can provide. That doesn’t always parlay to sales and business strategy,” McCoy said. “I am sure that I am the source of many a gray hair for Reed Nyffeler [Signal 88’s CEO]. The reality here is you have to listen. You have to do what people who have built a business and done it before you tell you to do. But when it’s your name and your business, it’s extremely easy to forget that these people are here to help you. It’s a completely different set of instructions.”

This is true of any franchisee—military-experienced or not—but it’s something McCoy says veterans should be aware of.

“People who join the military are Type A personalities, more so than not. These type of people need structure and they need guidance. When freewill is given to them that they haven’t had before, it can be taken advantage of,” McCoy said.

Another challenge for some veterans in business—especially those with the “Type A” personality traits McCoy mentioned—is learning not to react too quickly.

"I think problem-solving is such a critical aspect of someone in the military—you’ve got an immediate problem and you need to solve it right away. In running a business, sometimes that solution isn’t as obvious or requires some real time and patience in letting a solution sink in to reap its benefits,” said Meg Roberts, president of Molly Maid. “Veterans are so action-oriented—it can be a little bit challenging for them to have the patience to let a problem be understood and corrected over a period of time without the same level of immediacy that is typical in the military.”

Molly Maid offers vets a $2,500 discount off the $14,900 franchise fee. The daughter of a vet, Roberts says prospective franchisees who have military experience are especially attractive to Molly Maid.

“We work hard to provide the special treatment we believe veterans deserve. We very much appreciate the efforts of veterans, we’ve seen veterans have great success with our business model, and we want to encourage them in whatever ways we can to help them become business owners,” Roberts said.

Researching a franchise
Researching and deciding on a franchise from the thousands of opportunities available can be overwhelming for anyone, but for an active soldier, especially one stationed abroad, it can seem nearly impossible.

Signal 88 CEO Reed Nyffeler says it can take twice as long for active military personnel to research and start up a franchise because they begin researching their opportunities while stationed abroad and can only conduct their in-person research while on leave. At Signal 88, the typical sales cycle for an enlisted prospect is close to year, compared with 90 days for non-military franchisees. This extended research cycle may be necessary for candidates to complete their due diligence and to save enough money to fund the endeavor.

For an enlisted prospect, it’s not easy to pick up the phone and call a franchise development person or to call 20 current franchisees for validation. They need online tools—on-demand webinars, a PDF of franchisee satisfaction reports, easy-to-access educational materials—that they can look at wherever and whenever they want. If a franchise doesn’t offer these materials on their site, prospective franchisees should ask for them. As Signal 88 franchisee McCoy told us, email may be the primary mode of communication for vets considering a franchise and the way they conduct the majority of their due diligence.

“I basically did a Google search for security franchises, and Signal 88 popped up. I shot Reed [Signal 88’s CEO] an email, and from December 27, 2008, until April 1, 2009, Reed and I chatted literally every single day,” McCoy said.

Veterans researching franchise options and opportunities may also want to look at some of the vet-focused brands that have emerged in recent years. J Dog Junk Removal, for example, is a new franchise that launched in 2012, was developed by a vet, and is only available to veterans and active duty servicemen and women. (At press time, J Dog Junk Removal had fewer than 10 operating units and was not eligible to participate in our research.)

The International Franchise Association’s VetFran organization is a great resource for veterans and active military. The IFA started VetFran in 2002 to encourage franchise brands to proactively recruit and incentivize veterans for franchise ownership. Today, the voluntary organization has more than 500 franchise members, and they’ve helped more than 4,000 veterans become franchise business owners.

It’s important to note that, although many companies aggressively recruit veterans through discounts and other special offers, not all of them provide great opportunities for vets. Thorough due diligence—especially research into how other vets have fared in the system--is still a requirement for any prospective franchisee.

Concepts/Sectors
Our research on veterans in franchising falls closely in line with our research on franchising in general – the most successful franchisees don’t necessarily have direct experience in their particular industry sector. And in the case of those with military experience, they aren’t necessarily drawn to sectors or services that match their military specialties.

This was certainly true of Sport Clips franchisee Chris Parker, who spent 22 years in the Air Force before becoming a franchisee. Parker and his wife Karen ended up buying a Sport Clips franchise after working with a business ownership coaching firm and researching dozens of franchise opportunities.

“It was a giant step for us because neither Karen nor I had any experience in either business or hair care. For us to do this, we needed to make sure we were comfortable enough to execute the game plan,” Parker said.

Of course, many vets are drawn to hands-on concepts—such as Signal 88, Snap-on Tools, Auto Appraisal Network, and TeamLogic IT—that require skill sets similar to what they did in the military. The military breeds a lot of younger vets that are mechanical or technical or they specialize in other areas that require hands-on “hard skills.” Many of these veterans would not be attracted to a retail or food franchise because of the skills required to run those businesses.

When it comes to our Top Franchises for Veterans, the top companies on our list are split across several franchise sectors: Advertising & Sales (1 company), Automotive (6 companies), Business Services (4 companies), Child Services (2 companies), Cleaning & Maintenance (12 companies), Finance & Tax (5 companies), Fitness (2 companies), Food & Beverage (15 companies), Health & Beauty (2 companies), Home Services (8 companies), Pet Services (1 company), Real Estate (4 companies), Retail (4 companies), Senior Care (6 companies), Services (21 companies), and Sports & Recreation (2 companies), Technology (2 companies), and Travel (3 companies).

Investment Levels
Our research on investment levels most popular with veteran franchisees once again falls in line with trends across all of franchising. Veteran franchisees, like their non-veteran colleagues, are drawn to a wide range of investment opportunities. Franchise Business Review’s 2012 Top 100 list includes a diverse group of investments, starting as low as $5,675 for a Sit Means Sit dog-training franchise and exceeding $4 million a food concept like Quaker Steak and Lube.

FASTSIGNS’ Monson told us that her company hasn’t attracted many younger vets because the investment level is higher (around $200,000). In her experience, younger vets generally can afford lower-cost investments, which is in line with our findings. This may also be because many veterans are attracted to some of the hands-on service-type concepts that can be mobile-based. [See more on concepts popular with vets under Concepts/Sectors.]

Franchisee Satisfaction
In our recent survey of close to 3,500 military-trained franchisees, we found ten brands that especially stand out when it comes to franchisee satisfaction: Heaven’s Best Carpet Cleaning, CertaPro Painters, Sotheby’s International Realty, American Poolplayers Association, Cruise Planners, Home Instead Senior Care, FASTSIGNS, TeamLogic IT, Miracle Method Surface Refinishing, and Jan-Pro. Not surprisingly, many of these names are the same brands that top our annual list of Top Franchises for all of franchising. It makes sense that brands focused on overall franchisee satisfaction would also have high satisfaction among franchisees who are veterans.

In terms of overall satisfaction, veterans rated their overall satisfaction about the same as in 2011. This is significant considering that overall satisfaction among all franchisees (veteran or not) is down 5% year-over-year (based on surveys of over 30,000 franchisees across all industry sectors). The top five areas where satisfaction of veterans outranks non-veterans are marketing and promotional programs, effective use of technology, training and support programs, system-wide communications, and overall enjoyment running the business. Interestingly, military-trained franchisees rank their franchise systems’ team culture (involvement of their fellow franchisees, honesty and integrity of franchisor, etc.) slightly higher than non-military—perhaps reflecting the military’s emphasis on teamwork and solidarity. Eighty-one percent said they enjoy being a part of their franchise organizations. Seventy-nine percent say they would recommend their franchise to others, and 72% said “they would do it again today” in regard to investing in their franchise.

In terms of financial performance, veterans rank their franchise systems almost exactly the same as non-vets. Thirty-five percent of veterans (exactly the same as FBR’s benchmark for all franchisees) said their overall financial picture is “Strong” or “Very Strong”, and 24 percent said their overall financial picture is Weak or Very Weak (compared with our benchmark of 21 percent). Fifty-nine percent of veterans rated the long-term growth of their franchise as “Strong” or “Very Strong,” compared with our benchmark of 58 percent.

Although the average annual earnings (profit) for vet franchisees is identical to the FBR benchmark ($64,000), our data show vets as slightly less likely to own multiple units. Since multi-unit operators typically have higher profitability, it’s interesting to note that franchisees who are veterans are just as profitable as non-vets. Since they own fewer businesses, in effect, vets may be more efficient at operators than their non-vet peers.

Summary
Hundreds of franchise brands offer special discounts and incentives to prospective franchisees with military experience, making it an excellent time for veterans to consider a franchise opportunity. Franchise brands recognize the significant strengths and related skills that veterans can bring to a business—especially a franchising business, which is built around systems, teamwork, and following a step-by-step protocol. Franchisees with military experience aren’t necessarily guaranteed success, but they may have more characteristics for success than non-veterans.

From the perspective of a potential franchisee, veteran or not, it’s always important to carefully research a particular brand before investing. Even though a number of franchise brands offer special incentives to franchisees with military experience, these brands should still be thoroughly vetted to ensure a good fit. Prospective franchisees (especially those stationed abroad) should ask franchisors for online company materials and financials, franchisee satisfaction reports, webinars, and anything else you need to make the research process easier from afar. Perhaps most importantly, you should contact existing franchisees who are veterans to get the true picture of how well the system supports vets.

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