Franchising: An Opportunity for Veteran Entrepreneurs?
February 5, 2015 | Business and Careers
By Sonya Stinson
Fifteen years ago, when Army Master Sergeant Grant Springer was deployed to the Balkans region of southeastern Europe, he was struck by the area’s serene, natural beauty. The landscape of Albania was especially striking—so much so that Springer called his wife, Nadja, back at his home base in Germany and told her they should think about buying property there someday.
Today, the Balkans have transformed into a burgeoning tourist destination, and the Springers are now running a cruise business that takes clients to tour Grant’s beloved Albania and the surrounding region. They also offer tours to many other places around the globe.
To do this, they acquired a franchise with travel retailer CruiseOne in November 2013, joining one of the hundreds of U.S. businesses that offer special programs for veteran franchisees. CruiseOne offers veterans a 20 percent discount off the franchise fee and was named the top franchise for veterans in 2014-15 by Military Times. Rounding out the second and third spots, Sports Clips, Inc., a sports-themed barber shop for men, and Signarama, a business signage company, also offer discounted franchise fees for veterans as well as management assistance and training. With Signarama, that initial discount grows from 10 percent to 50 percent based on the franchisee’s years of military service.
The leadership skills veterans gain during military service often translate well to running a franchise business and tackling the challenges that come with it. Industry magazine Franchising USA suggests that having a business model based on a set of standard operating procedures is one of the features that makes franchise ownership appealing to veterans, who are accustomed to rules and order. Further, veterans are known for their “ability to be both a leader and a team member,” a key trait for running a successful franchise.
Taking the Plunge
Springer got the idea to become a franchise owner while pursuing his MBA at Georgetown University. Now, as well as running the cruise business with his wife, he is also the senior military instructor in the university’s Army ROTC leadership program. While researching his thesis on the transition from military to civilian life, a friend pointed him to online information about franchise opportunities for veterans. What Springer learned prompted him to turn his paper into an actual business plan for obtaining and operating a franchise.
“I liked the idea of a preset model that I can make my own while still having someone assist me and that has been successful in the past,” said Springer, who plans to retire from the military in January 2015.
Springer spent six months investigating a variety of industries to find the best match for his background, location and business goals. He finally zeroed in on travel, in part because his wife Nadja, a native of Switzerland, had always dreamed of becoming a travel agent. He was skeptical of the viability of such a business at a time when it’s so easy for people to plan their own travel online. “Surprisingly,” he said, “it scored the highest in almost every [criteria].”
Path to Success
The couple applied for a CruiseOne franchise in May 2013, and by October 2014 they had already exceeded their goal of reaching $150,000 in sales in their first year of business. The support they’ve received from CruiseOne to run the franchise includes a weeklong training session at the company’s headquarters in Ft. Lauderdale, Florida, and ongoing resources such as field representatives who check in with them at least once a month and an online forum where franchisees post questions and share information with each other.
As novice entrepreneurs, one of the biggest lessons the Springers learned about franchising was the importance of studying up on state and local tax rules and business laws. They faced a huge tax bill at filing time by not realizing they should have been making incremental payments throughout the year.
Choosing a Franchise
With thousands of franchise opportunities available in the U.S., choosing the right business for your situation can be challenging. The International Franchise Association (IFA) offers many tips for evaluating and selecting the best franchise opportunity. Among the questions to consider:
- How much time and money will you have to invest in the business before it becomes profitable?
- Do you have the right technical and business skills to manage the franchise?
- How much demand is there for the product or service you’d be selling?
- What is the franchisor’s record of experience in this type of business?
- What kind of training and support does the franchisor offer?
For more information on franchise opportunities for veterans, the U.S. Department of Veterans Affairs’ Office of Small & Disadvantaged Business Utilization (OSDBU) website offers a number of resources in partnership with the IFA. The OSDBU website also has links to the IFA VetFran Directory of franchise systems that offer financial incentives for veterans. It further includes information about the IFA Educational Foundation’s Veterans Scholarship Program, which pays $2,500 toward the pursuit of entrepreneurial studies.
Just as Springer’s soldiers once needed his guidance when heading into unfamiliar territory, he, too, needed someone to lead the way as he ventured into the unfamiliar world of entrepreneurship. For Springer and many veterans like him, a franchise operation offered precisely that invaluable direction for success.
Sonya Stinson is a writer for print and web publications, businesses and nonprofit organizations. She writes about higher education, careers, small business, retirement and personal finance.
Originally published on Northwestern MutualVoice on Forbes.com.