Designed to Give Back
Franchise businesses are excellent opportunities for veterans to continue serving.
By James R. Schenck
Every year, 250,000 military members leave the service and enter the civilian workforce. Making the transition to civilian life is one of the greatest challenges they face in their careers. Through their military training, tested leadership and professional skill sets, veterans are often uniquely suited to work in industries outside the military.
Veterans have a history of entrepreneurship. Traditionally, many veterans start their own businesses after leaving the service. Half of all American World War II Veterans and 40 percent of Korean War Veterans became entrepreneurs. Today, of the 5.5 million businesses in the United States, 7 percent are veteran-owned.
Veteran-Owned Businesses Down
But that number is declining. Only 4.5 percent of the 3.6 million people who have served in the U.S. military since September 11, 2001 have launched a company. Why the decline? Pressure to settle for a financially secure position and a lack of networking opportunities contribute to the problem.
Perhaps most importantly, many veterans today simply cannot get financing without a business history — which most veterans don’t have. More than half of businesses today require up to $25,000 to start. That’s a lot of money for the average service member just coming out of the military.
This is one reason why the PenFed Foundation launched the Veteran Entrepreneur Investment Program (VEIP). VEIP helps veteran-owned businesses succeed by providing seed money and a support network of more than 1,700 business partners. Since we announced the program last year, we’ve raised more than $1.4 million from businesses that support veteran entrepreneurs.
True Made Success
Our first investment, True Made Foods, was founded by Navy helicopter pilot Abe Kamarck in 2015. A father of four, Abe was concerned about the unhealthiness of some of the foods his kids were eating. He decided to rethink how ketchup and other popular sauces are made. True Made Foods adds real vegetables to the recipes, turning empty calories from sugar into nutrient-rich flavors. This company is already seeing remarkable success, selling its products in more than 1,400 stores across the country, including major grocery chains like Safeway, Wegmans and ShopRite.
Veterans like Abe already possess a critical skill for successful entrepreneurship: grit. They persevere when others give up. This is because their military training has uniquely taught them how to perform at a high level under the most stressful conditions. Today, veteran-owned businesses earn $1.14 trillion in annual revenue and create jobs with a payroll of $195 billion.
Fostering veteran entrepreneurship also helps reduce veteran unemployment. Veteran-owned businesses started within the past 15 years have created 324,000 jobs. That’s a great untapped potential for future job growth.
Supporting veteran-owned businesses doesn’t just help a single veteran: it can have a domino effect that boosts the entire community. Because veteran-owned businesses are 30 percent more likely to hire veterans, helping these businesses succeed means lower veteran unemployment. The small businesses veterans create bring jobs and enrich local communities.
Franchise businesses are a great opportunity for veterans to continue serving their communities as local entrepreneurs. Veterans have always been drawn to the franchise business model, and franchisors have long recognized that entrepreneurial veterans are some of the best-qualified, most motivated and successful prospective franchisees. Even though veterans account for about 7 percent of the population, 14 percent of franchisees are vets.
Franchising is one of America’s most enduring contributions to business. The franchise business model allows individuals to go into business for themselves, but not by themselves. Franchise businesses have rapid training opportunities, scalability and a need for the operational execution skills that veterans possess.
The opportunities are there, and VetFran is a gateway resource. The program educates veterans about entrepreneurship and franchising nationwide, and it encourages franchisors to commit to our nation's heroes. The program works with a wide array of private and public sector partners and is funded entirely through the generous support of sponsors.
A recent VetFran survey showed that a whopping 99 percent of surveyed franchisors think veterans are a good fit as employees within their company, while an equally impressive 97 percent say veterans make excellent franchisees. Seventy percent have brought on a veteran franchisee or corporate employee in the past year alone.
That’s why PenFed Credit Union has partnered with VetFran to dramatically increase efforts to reach veterans across America. In addition to helping VetFran with funding the national campaign of veteran-led events and speaking engagements, PenFed has also pledged to support veterans in their dreams of owning a franchise through PenFed Foundation programs.
All franchise companies should not only seek to hire veterans, but also recruit them for franchise business ownership. Veterans will be among your best hires and also your most outstanding
James R. Schenck is president and CEO of PenFed Credit Union and CEO of the PenFed Foundation. The former Army Black Hawk helicopter pilot, who graduated from West Point in 1988, was selected by HillVets in 2015 as one of the 100 most influential and impactful veterans in the U.S.