Best For Vets: Franchises 2016 � 42 Brands With Benefits

Tuesday, September 15, 2015

Are you compatible? Do you share similar values? Can you depend on them for support? How have their other relationships gone? Are they in it for the long haul? Are you? Important questions when you're trying to find a spouse, for sure.

But you should also have these things in mind if you're considering a franchise.

You can always transfer out of a bad college or put in your two weeks' notice at a bad job. But pick the wrong franchise and you could be stuck for years � or have to deal with big debts.

The rankings The methodology "Looking at a franchise opportunity, you've got to think of it in terms of a marriage, because it is a long-term relationship," said Tim Courtney, a vice president with CruiseOne, which took the top spot in our Best for Vets: Franchises 2016 rankings.

Vets who are thinking about franchising should do plenty of research, consider what type of work and hours are best for them, and be wary of offers that sound too good to be true, Courtney said.

And be sure to consult your loved ones before you make any proposals to a franchise.

"Always involve your family � your spouse, your children � in the decision," he said, because it will certainly affect them.

What they offer Franchise brands across the country, representing a wide variety of business types, responded to the 2016 version of our Best for Vets: Franchises survey.

CruiseOne, a low-cost travel franchise, topped our rankings for the second straight year, followed by TSS Photography, Snap-on Tools, ATM franchise ACFN, and Sport Clips.

Almost every franchise brand that responded to this survey indicated that they discount costs for veterans, active-duty service members or their families, in one way or another.

This most commonly took the form of a discount off the initial franchise fee. More than 91 percent of responding brands discount this fee, with the average discount amounting to about 17 percent.

Just a few brands told us they discount their ongoing royalty fees.

Every franchise brand that responded to this survey allows veterans to start with just a single franchise unit, including a couple that would require other franchisees to commit to multiple units right away. That could make it easier for a vet to get started.

Better than four in five told us they are members of VetFran, a part of the International Franchise Association focused on veteran franchising issues.

Yet many lack policies and practices that could be important to military-affiliated franchisees. For example, fewer than one in six offer extra help to reservist franchisees who get activated, such as delayed financial obligations or help managing their businesses.

The vast majority also lack military affinity groups, military-specific websites, and military and veteran networking events, and only a little more than one in four facilitate mentoring between veteran franchisees.

About one in three responding franchise brands told us they have current or former service members or military spouses in their company leadership ranks.

What to look for Two of the most important things to consider when evaluating a franchise are the continuity and growth rates. Continuity rates show what proportion of franchises cease being run by their franchisees; growth rates show whether the number of franchises is skyrocketing, plummeting or holding steady.

In their franchise disclosure documents, responding brands charted continuity rates averaging about 93 percent over the past three years, while growing at a 5.3 percent clip.

By comparison, franchise brands indicated a similar continuity rate for military- and veteran-owned franchises of 90 percent, while recording a growth rate of better than 17 percent for such franchises.

Veteran franchising is clearly on the rise.

"Vets make good franchisees � they're disciplined; they like following a system; they're hard-working," said Shirley Warrington, franchise development manager for TSS Photography. "We typically see higher success rates." Warrington added that many of her brand's veteran franchisees appreciate the fact that franchising allows them to work from home alongside, and sometimes in partnership with, their families.

"A lot of our owners do run their businesses either with their kids or their spouses," she said.

Start while you're still in � or take it slow Most military-connected franchisees wait until they get their discharge papers to start franchising � but not all.

Staff Sgt. David Frost is still serving on active duty in the Air Force, but he's been a CruiseOne franchisee for about 10 months.

"To be honest, it's not extremely easy," he said, to juggle the demands of franchising and military service at the same time. "You just have to be fairly good with time management." Frost hopes the extra work will pay off in the long run. "I wanted to start while I was in the Air Force, so that way I could get going before I got out," he said.

Other franchisees will choose the opposite approach, waiting until they separate and then taking the extra step of working for a business as an employee before franchising with the company.

If CruiseOne franchisees hire a veteran, the brand waives the typical $495 training fee, Courtney said. That offer applies to the first veteran hired, regardless of whether the franchisee is one. Subsequent veterans hired by the same franchisee are trained at half the normal cost.

Franchisees will encounter many challenges and obstacles running their own businesses. For TSS Photography franchisee Mike Tuckner, one of the biggest was figuring out accounting and taxes for his business.

"That was a little scary, I think, going through the first year," said Tuckner, a former specialist in the Army National Guard.

But he never felt alone. "It's not like you're being sold a franchise. It's like you're entering a partnership." Franchise brands and their franchisees emphasized the importance of a brand offering plenty of support.

Gordon Logan, founder and chief executive of Sport Clips, credited his company's support infrastructure for its near-perfect continuity rate.

"There's no such thing as a risk-free investment," he said. But strong support from a franchise brand "really increases the probability for success." Sport Clips has a multi-month orientation period, telephone and online learning modules and an intensive five-day, in-person training program. And that's just to start: Franchisees can expect regular checkups and more help well after they open up shop, he said.

Ed Passarelli Jr., an Air Force and Air National Guard veteran, said he's gotten more support from Sport Clips than he expected. In addition to relying on the franchise brand for help, the former technical sergeant also leans on his fellow Sport Clips franchisees.

"I call people constantly to ask them what they do, how they're doing it, whether I can duplicate it or not," Passarelli said. "They are not competitors. We are all in this together, as a team."

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