Transitioning from military to civilian life presents new opportunities as well as challenges for veterans. Many veterans look forward to life after the military, and at the same time, have a lot of unanswered questions. “What am I going to do with this new phase of life? Will I be able to find a job? How can I start my own business?”

Over the next 4 - 5 years more than a million troops are returning home with these questions in mind. Franchise businesses are looking to recruit veterans into small business ownership because veterans make great franchisees. Unfortunately, many veterans interested in starting a business don’t know about the variety of industries, investment levels or understand how well their skill sets are transferable to franchise business ownership. In my conversations with hundreds of veterans over the last few years, most are only aware of the major food franchises. Many I’ve spoken with, that are interested in entrepreneurship, were surprised to find there are franchises available in different fields.

The transition period is the perfect opportunity to explore franchise ownership and answer the questions you may have about your ability to own your own business. Knowledge is the key to mitigating investment risk and may make all the difference in your decision and selection process. This article will outline a few questions to think about when researching a franchise opportunity.

Why Consider Franchising
The continual growth of franchising and its impact on the GDP is really remarkable. There is no question that owning a franchise as opposed to “going it alone” is a smart way to go into business. The amount of time and money that is saved by choosing a system that has a well-known brand, a proven success rate, an established marketing strategy, and supports the franchise throughout different business cycles, helps support the popularity of taking on a franchise. People want to be in business for themselves, not by themselves.

One of the greatest advantages of investing in a franchise over building a business from scratch is the ability to leverage your investment. While some banks will still loan funds to a qualified individual to start a business, the hurdles to acquire funding are quite significant. With the state of the industry, you now have to provide higher quality information to lenders to improve your chances of securing a loan. 

When investing in a franchise, the loan process is easier.  Franchise companies have a track record of other business owners who have run this type of business successfully. In addition, franchisors usually have relationships with lenders and will help their franchise prospects apply for and obtain funding. A franchise broker can also give you access to lending information, companies that they recommend and would (or maybe have) used, giving you direct access to companies and contacts that know the benefits of franchising and helping your chances of getting the loan to start your business.

Using a Guide on Your Franchise Quest
Abraham Lincoln said “a man who represents himself has a fool for a client.” What he meant was, it is difficult to be objective when representing one's self in any capacity. Unfortunately, when considering franchise ownership many try to go it alone and don’t leverage the expertise and resources available to them.

When you buy a house, you consult a real estate agent. When you go to court, you consult an attorney. When you have a toothache, you see a dentist. Why would you try and buy a franchise without consulting a franchise adviser? Buying a franchise is a major investment and an endeavor in which you should work with someone who’s familiar with the industry, has specialized expertise and understands the process of franchise acquisition and has access to resources that may help you make the right decision in selecting your franchise.

Of course, you can use the Internet to find the franchise of your dreams or can you? Today, there are more than 3,000 franchises in 75 different industries. When you Google "franchise opportunities," you'll find a staggering 36,800,000 results. If you were to spend one minute looking at each opportunity it would take nearly 70 years.

Finding the “Right” Business for You
Even if you manage to narrow down the franchise opportunities that you think are interesting and fit your goals, how do you know which is right for you? As I mentioned earlier, deciding to go into business is both an emotional an intellectual decision. You need to ask yourself some hard questions, which are critical for realizing success.

• Are you a business builder? Or a business worker?
• Are you seeking a business to replace a job?
• How long before you need to generate positive cash flow?
• Do you have adequate finances and capital to invest into a business?
• Does your spouse or partner approve of owning a business?
• Does owning a business outside of your current skill-sets concern you?
• Do you work well in team environments?
• Are you comfortable selling?

Franchise Brokers (AKA: Consultants, Advisers, Coaches)
Franchise brokers help people who want to buy a franchise. Typically, their role is to review the amount of money you have to invest and then direct you to opportunities that match your interests and resources. A broker may also help you complete applications and the paperwork to consummate the sale. Franchise brokers generally make money only if a sale is completed.

Some franchise brokers may claim to be able to match you with “the perfect opportunity” because they represent a wide range of business sellers. That may be true—or not. In some instances, franchise brokers represent only a few franchisors and, as a result, their suggestions may be limited.

Some franchise brokers may claim that they will suggest only those franchises that meet certain standards. You may think this means that your financial risk is limited because the broker is weeding out the poor investments. In fact, some brokers represent any franchisor willing to pay them a commission for a sale. If you rely on a broker, be skeptical: you may be directed to a franchise that is failing or that does not have a track record for success.

Finding the “Right” Broker for You
What should you consider when seeking a broker to represent you? Just like in real estate, there are two sides to the market place, the “sell” side and “buy” side. The “sell” side represents the franchisors while the “buy” side represents the prospective franchise buyer and represents the best interest of the buyer. This will not always be obvious as some brokers will represent them selves as buy side even though their wallets belong to franchisor. One indicator of a “buy” side broker is that along with the typical role of the broker, they may offer additional assistance or access to resources such as legal and CPA consultation, help in financing, or directing them to resources to help the buyer write a business plan. They may offer tips or assistance to negotiate your franchise agreement. If a broker tells you that you there’s nothing to negotiate with a franchisor, then you know for sure you’re working with a sell side broker.

A good buy side broker carefully selects the franchisors they represent and helps guide you to the franchise that best fits your investment values, skills and goals. Also, you must consider that since not every franchisor wishes to be represented by brokers, some good franchisors are, by necessity, excluded from even the most well meaning broker's analysis. A good broker will disclose this information and let you know up front of the limitations of their services.

As a buyer, you may also want to consider the broker's experience, not only as a broker, but also as a business professional. Does your broker have unique knowledge that would be beneficial to you in your search and selection process? Does your broker have the requisite experience to help you to understand the pros and cons of the business and market that you are interested in?

Purchasing a franchise is often one of the largest expenses and important decisions a family will make. The challenge is that there are thousands of opportunities out there! And the right choice to match your personal and financial goals are typically not the franchise brands you are thinking about. A lot of the established brands are over-saturated, very expensive, and don’t give you the ROI you think that they would. Do your research and choose wisely.

At your service,
Rich Ashe
Veteran Franchise Adviser