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Buying a Franchise: How Soon?

Determining the best time to start a franchise

Military veterans may be divided into two classifications with respect to post-service jobs: officers and non-commissioned officers (NCO) who were in command and want to be their own bosses in civilian life; and junior officers and enlisted personnel who have a strong entrepreneurial spirit. The two groups are not mutually exclusive, of course, and both often find buying a franchise to be the quickest and best path to achieving their end goals.

An important consideration for the new or soon-to-be veteran is how soon to buy a franchise. Is it better to wait one, two, or more years to become acclimated to civilian life and perhaps increase the money set aside for a new business? Or does waiting only delay achieving the ultimate goal of business ownership?

“The advantages to waiting are [that] it gives you a chance to submerse yourself in the civilian side while getting your feet on the ground – and there is a lot to get used to. It provides a safety net, allows you to build up or find financial resources,” says former Marine Capt. Mary Kennedy Thompson, now president of plumbing franchisor Mr. Rooter and vice chairman of the Veterans Transition Franchise Initiative (VetFran) committee. “I wanted to get going as soon as possible, but didn’t want to make it one step forward, two steps back. I wanted to be prepared, with my homework done and financial resources in place.

“The disadvantage is [that] the longer it takes to open your business, the longer it takes to be successful – and veterans don’t like to wait. And if there is a great opportunity for a franchise, you run the risk of someone else buying that franchise and moving in where you want to be. You also may miss the opportunity of a growing market.”

The decision on how soon to act can be compared to planning a military campaign.

The “enemy” is competition, primarily the possibility of losing the franchise and location you want to someone else or seeing another franchise move in and “conquer” the territory first.

“Logistics” includes several factors, the first being how much money the veteran has available – not only to buy the franchise, but to support it and his or her own living expenses until the new venture begins to make money. Another is whether the veteran has the right experience and training, fresh out of uniform, to handle the demands of running a civilian business.

“The options for a new veteran are to start a business or go to work for someone else. If they think they may have money issues, going to work for someone – especially the company they may want to buy as a franchise – not only helps them save money, but also learn about the business.”

And just as any major military operation needs the support of the people back home, buying a franchise needs the support of family and friends.

“The options for a new veteran are to start a business or go to work for someone else. If they think they may have money issues, going to work for someone – especially the company they may want to buy as a franchise – not only helps them save money, but also learn about the business,” notes Chris Loudermilk, military development officer with multi-brand franchisor The Dwyer Group.

Age also is a factor – an older veteran who retired as a senior officer or NCO may be better positioned financially. At the same time, these are the same veterans most likely to be offered a senior position and high salary in the private sector. While all military experience is viewed as a major plus by franchisors evaluating would-be new franchisees, older, more experienced veterans often are considered the best prospects to succeed there, as well.

One major reason for waiting also has a military equivalent: ISR – information, surveillance, and reconnaissance.

“A lot of veterans really don’t know what a true franchise is. Most people think of McDonald’s and a lot of what they think they know usually isn’t true. A lot of what I deal with is quashing myths and explaining how a franchise actually works,” Loudermilk says, adding two misconceptions in particular are most common.

“For example, a lot of people think there are only a limited number of franchises – mostly fast food – and not for whatever it is they want to do. But a lot of times, whatever a veteran’s MOS [military occupational specialty] may have been, there is a civilian franchise for that. Another big misconception is [that] franchises are super expensive. In fact, there are a lot of very affordable franchises you can buy, one for just about every price range.”

West Point graduate and former Army Capt. Dan Tidwell, who now owns two DirectBuy franchises in Houston, Texas, believes the best approach to understanding civilian business – and especially how a franchise operates – is to join the team before buying it.

“Obviously, it depends on the franchise and individual, but if you want to open a franchise that requires skills you really haven’t had experience with in the military, having some experience in that industry first is critical,” he says.

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J.R. Wilson has been a full-time freelance writer, focusing primarily on aerospace, defense and high...