Congress Can Do More to Help Veterans Transition to the Private Sector

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By Kevin Blanchard

The private sector can offer more opportunities and a better path from the military to entrepreneurship if Congress passed legislation to help veterans invest in franchises, said Wade Franklin, U.S. Navy veteran and owner of The UPS Store in Arlington, Va. Franklin testified on behalf of the International Franchise Association before a hearing of the U.S. House Committee on Small Business, titled “Military to Entrepreneurship: Private Sector Initiatives to Help Veterans Pursue Business Opportunities.” Opening a business is a unique challenge for transitioning veterans and private-sector programs such as IFA’s VetFran program can be extremely beneficial in filling the support gap that often exists once veterans exit the military, said Franklin. He opened his store in 2012 with the assistance of The UPS Store’s VetFran incentive, a $30,000 franchise fee waiver which he said was essential to his initial success. IFA launched VetFran in 1990, a strategic initiative to help U.S. military veterans access business ownership opportunities in franchising. Today, more than 640 franchise companies offer incentives to veterans interested in starting their own business.Opening a business is a unique challenge for transitioning veterans and private-sector programs such as IFA’s VetFran program can be extremely beneficial in filling the support gap that often exists once veterans exit the military, said Franklin. He opened his store in 2012 with the assistance of The UPS Store’s VetFran incentive, a $30,000 franchise fee waiver which he said was essential to his initial success. “There are obvious challenges to jumping straight into running a business without prior experience, which few average veterans have.” Franklin said. “The most important decision was assessing the financial resources available to me, and allocating those resources as best I could.  That was, and remains, the most difficult obstacle for me to overcome in becoming a business owner.” Franklin referred to legislation that can help more veterans realize the American Dream of owning and operating their own businesses. H.R. 3725, sponsored by Rep. Bill Flores (R-Texas), the Veterans Entrepreneurs Act of 2013, was introduced last year to assist veterans in opening franchise businesses. It would provide a tax credit to qualified veteran franchise owners, worth up to 25 percent of the initial franchise fee, capped at $400,000. “When coupled with the incentives offered by franchise systems through the VetFran program, this tax credit will go a long way toward helping veterans open new businesses and create opportunities for both themselves and others,” he said. “IFA has a long and proven history of supporting our nation’s veterans,” said IFA Pres. & CEO Steve Caldeira, CFE.  “We will continue to help transition servicemen and women to the civilian workforce. The IFA is also committed to educating its members so they can better understand and leverage the unique skills and experience our veterans have to offer.”

Commitment Surpassed

On Nov. 5, 2013, IFA announced that 151,557 veterans and military spouses have entered franchising since 2011, including 5,192 as franchise business owners.  These numbers dramatically surpass the commitment made by the IFA two years ago in launching the Operation Enduring Opportunity initiative within its VetFran program to hire and recruit 80,000 veterans, wounded warriors and military spouses by the end of 2014. IFA is also working with the U.S. Small Business Administration to help veterans learn about franchising options.  Franklin’s store in Arlington, Va. was the site of the signing of a new partnership between IFA and the SBA in 2013, establishing a partnership to start, maintain and expand small-business opportunities for veterans in franchising. Through a Strategic Alliance Memorandum signed by Caldeira and then-Acting SBA Administrator Jeanne Hulit, IFA and SBA are working to support small-business development through specific training and outreach activities for veterans and their families.

Kevin Blanchard is coordinator of research & strategic initiatives for the International Franchise Association.  Find him at fransocial.franchise.org.

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