By Jon Franz
Research and experience have shown that veterans make great franchise owners and that the business model is a gateway to entrepreneurship, prosperity and success for those who’ve served. Veterans make up 14 percent of all franchise owners, with 97 percent of franchisors viewing them as excellent franchisees. They leave the military with the leadership and teamwork skills to run a business, and they’ve thrived in a large and structured system throughout their careers.
Learning, training, and executing standard operating procedures is what they do better than almost anyone else. Perseverance and discipline gained through years of service, combined with the entrepreneurial spirit, make for a perfect combination, and franchisors know it.
Veterans who buy an existing franchise (resale) unit have a faster and smoother path to success. Here’s why:
An existing franchise has a proven track record of success. Buying an existing franchise offers immediate cash flow, an established customer base, and trained staff, significantly reducing startup risk, stress, and time investment. As a franchise resale buyer, they’ll have access to all the information they need to make an informed decision about buying the business. By law, franchisors must provide audited financial statements for the last three years. They must also disclose the current franchisor’s background, litigation history, and all the initial fees, estimated investment, ongoing royalties, training, advertising, and restrictions.
Buying an existing unit gives a buyer access to the owner’s experience and best advice. Some franchise buyers worry that if an owner is selling the business, it must be in decline. The truth is that most franchisees sell when they’ve achieved financial success but don’t have as much gas in the tank for growing the business. Many sell because they’re retiring and ready to take their payday; they want to travel, relocate to their dream home or a tropical beach somewhere, or spend more time with the people they love. They’ll be honest with prospective buyers about their reason for selling, what it’s like to work with the franchisor, the required time commitments for running the business, financial and other lessons learned, and the talent and clientele the buyer will inherit.
The new owner might have a steep learning curve, but they’ll also have experienced staff who can provide business continuity. Buying an existing franchise offers immediate cash flow, an established customer base, and trained staff who know the business and their roles, significantly reducing startup time. The new owner won’t have to worry about sourcing, recruiting, and onboarding staff while learning the business. Buying a successful franchise unit with a sound management structure allows owners to focus on growing the business rather than spending all their time running it. Veterans will appreciate the fact that they can trust the staff to do the job – that’s one of the cornerstones of military leadership.
An established franchise unit will yield a faster return on investment. With established operations, you can often reach the break-even point sooner. You can analyze past performance, revenue trends, and costs to make more accurate, evidence-based decisions about operational improvements. And purchasing a franchise is probably more affordable than you think. The SBA’s 7A loan program doesn’t always require collateral or a large personal net worth. Plus, over 500 franchisors offer veterans reductions in franchise fees.
Veterans don’t need a huge amount of cash. If you see a business for sale for a million dollars, you don’t need nearly that much in cash. Through the Small Business Administration (SBA) you can apply for the 7(a) program. These loans feature competitive, SBA-negotiated interest rates and longer repayment terms, making them ideal for commercial real estate, working capital, equipment, and business acquisitions. Better yet, veterans get:
- • Reduced Fees and sometimes fees are waived entirely (for certain express loans under $1 million).
- • Loan Amounts: Up to $5 million ($500,000 for SBA Express loans).
- • Lower Equity: Veterans may secure loans with as little as 10% equity.
- • Competitive Terms: Long-term financing up to 25 years.
- • Faster Approval: SBA Express loans offer turnaround times within 36 hours.
The franchise model is attractive to many entrepreneurs. It offers plenty of advantages for both new and experienced business owners, including a strong brand’s proven track record and the structure and support provided by the franchisor. It is also the chance to build a second career and secure future after leaving military service.
About the Author:
Jon Franz is the founder of Franchise Clearly, where he oversees all company transactions and works closely with sellers to set clear expectations and simplify the franchise resale process. Since 2015, he has led more than $110 million in closed sales and developed proprietary software that brings transparency to every deal; he holds an MBA in Finance from the University of Central Florida and is a Certified Business Intermediary.