Franchising World April 2011
While the economy continues to putter along, franchise systems have been doing their part to help buck that trend among one key demographic all Americans can support—military veterans returning to the states and entering the work force. Over the past several years, an influx of military veterans have joined the ranks of U.S. franchise business owners through a variety of programs. Currently, more than 2,000 veterans have taken a path to business ownership through the International Franchise Association’s Veterans Transition Franchise Initiative, known as VetFran. According to IFA’s most recent VetFran survey, 2,089 veterans have become small-business franchisees since 2002 by taking advantage of financial incentives.
The association’s award-winning VetFran program not only links veterans with participating companies through its Web site,
www.franchise.org
, but also offers comprehensive information designed to aid prospective small-business franchisees in investigating a franchise before purchasing it.
Typically, discounts off the initial franchise fee can lower up-front costs by thousands of dollars.
VetFran was created by the late Don Dwyer Sr., founder of The Dwyer Group, to honor those who have honorably served our country. Dwyer understood that the skills learned through military service translated well into owning and running a franchise business. VetFran is a voluntary effort of IFA member-companies that is designed to encourage franchise ownership by offering financial incentives to honorably-discharged veterans.
VetFran was re-established following the Sept. 11, 2001 terrorist attacks. Since then, more than 400 IFA-member franchise systems have volunteered to offer financial incentives to help honorably-discharged veterans become franchise small-business owners. The participating companies and the discounts they offer can be viewed at
www.franchise.org
under “Franchises for Veterans.”
VetFran receives no government funding, but is officially endorsed by the U.S. Dept. of Veterans Affairs’ Center for Veterans Enterprise, which helps promote small-business ownership for veterans and named IFA a “Champion of Veterans Enterprise” in 2003. The award-winning program was also recently tapped by the American Society of Association Executives to receive its Award of Excellence for creating an “outstanding program which has resulted in a significant benefit to American society.”
Congress has also recognized the benefits of franchise ownership for veterans. The IFA-backed Help Veterans Own Franchises Act would increase the level of business ownership by America’s military veterans. The bill was introduced in 2009 by Reps. Leonard Boswell (D-Iowa) and Aaron Schock (R-Ill.) and had 45 co-sponsors at the end of the 111th Congress. The legislation would provide a tax credit for franchise businesses that offer qualified veterans a discounted initial franchise fee. It also would provide a tax credit to the veterans who choose to purchase a franchise and open a business in their local community. Sen. Bob Casey (D-Pa.) introduced a companion bill in the Senate in 2010. IFA anticipates the legislation will be re-introduced again this year with reduced support and will be lobbying aggressively for its passage.
Veterans in Franchising
IFA is working on the legislative and regulatory fronts to support the popular Veterans Transition Franchise Initiative, VetFran, to help more veterans realize the dream of business ownership. During the 2010 IFA Public Affairs Conference in September, IFA President and CEO Stephen J. Caldeira, CFE, and Daniel Allen, executive director of the Employer Partnership Office of the U.S. Army Reserve, signed a Certificate of Partnership to funnel franchise prospects from the Army Reserve, toward the VetFran program, In addition, VetFran participating companies will gain access to men and women who have expertise in executing military systems and policies gained from their military training.
In April 2010, President Obama issued an Executive Order to establish an Interagency Task Force on Veterans Small Business Development to coordinate efforts by federal agencies to improve capital, business development opportunities and contracting goals for veterans and service-disabled veterans. Franchising is specifically included in the Executive Order.
More veteran-owned franchises are soon to open. During the most recent survey of participating companies, IFA learned that more than 200 franchise agreements were in various stages of negotiation to acquire a franchise using the VetFran discounts.