Franchising: A second career for veterans

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For veterans who want to transition from the military, leverage their leadership skills and become business owners, but don’t want to start from scratch — franchising might be the perfect route.

Franchise owners purchase the name and run a location of a chain business. They can be their own boss and operate a company, but also have the benefit of support from corporate leaders and coaches.

Through a franchise system, the business’ marketing and products are already established. Most franchise owners don’t need prior experience in the industry of their choice. Franchise options run the gamut from restaurants to retail, from auto repair to real estate — and the list goes on.

Owners pay an initial franchise fee and ongoing royalty payments [a portion of the profits] to the franchisor. And here’s where veterans have an advantage: A number of companies offer a discount to veterans to provide them jobs and utilize their skills.

El Paso County has a population of 80,000 veterans and 40,000 active-duty personnel, with a large number leaving their military positions and looking for opportunities to stay in Colorado Springs.

According to some franchisees, companies are becoming more interested in working with former services members because of their valuable skills and to expand the company’s presence — including Mosquito Joe, a national mosquito-control business that just opened its first location in Colorado this year.

MOSQUITO JOE

Founded in 2010 and based in Virginia Beach, Va., the home-service company provides services to repel and kill mosquitoes, ticks and fleas for residential and commercial customers, with roughly 170 locations in 29 states.

So far, its only location in Colorado is in Greeley, but the company is interested in Colorado Springs for further development, according to CEO Kevin Wilson.

“Our location in northern Colorado is doing very well and was started by a veteran franchisee,” he said. “Most veterans make good franchisees because we give them a roadmap. They know how to follow a plan and execute.”

Military veterans own about 17 percent of the company’s franchises; Mosquito Joe hopes to reach 240 locations in 30 states next year.

People interested in owning a franchise must have a total initial investment of $94,500, including a $25,000 initial fee, with $2,500 of that waived for veteran owners, Wilson said.

Through the VetFran program, veterans can browse 600 different companies that offer special assistance and discounts. For more information, go to vetfran.com.

“About 22 of our franchises are owned by veterans who are hardworking, take ownership, accountability and appreciate our support and guidance,” he said. “We have franchisees from all military branches — excluding the U.S. Coast Guard — and really value them.”

Franchise owners have access to in-person training and an abundance of resources in the company cloud, as well as a franchise coach.

“Their coach is their first point of contact who visits them twice a year and is always available as a resource,” Wilson said.

The company conducts a thorough screening process for potential franchise owners, including meetings with corporate staff to make sure they’re a good fit, he said.

“Recruiting franchisees is the hardest thing we do because in the beginning, candidates put their best foot forward, and it doesn’t always work out. But veterans who’ve been Army Rangers, Navy Seals or along those lines often possess valuable traits that are important and appealing to us,” Wilson said.

Franchising with Mosquito Joe can lower potential business owners’ risk of losing money and the business going under, Wilson said.

“I tell them, ‘You’re in business for yourself, but not by yourself,’” he said. “They will have our support. We develop the system, products and marketing materials — it’s like business in a box.”

FREEDOM IN FRANCHISING

Hand and Stone franchisee Douglas Paul

For Hand and Stone franchisee Douglas Paul, the spa industry is an entirely new career path.

After serving in the Army for 27 years, he decided he was tired of military travel and ready to transition into business.

Paul opened the first Hand and Stone in north Colorado Springs in July, but it took him a year to get it up and running. He said his biggest challenge was working the backside of the business, including working through construction costs and delays, and securing loans.

But Paul said he’s received good input from a number of sources along the way, working closely with a Hand and Stone regional developer to work out details of the spa, and a franchise coach to lay out details of the business.

Initially, he said he looked into buying a gym franchise, but soon realized the market in Colorado Springs was pretty saturated.

“While deployed in Kabul, Afghanistan, I noticed a lot of soldiers utilizing spa and massage services on a few bases to relieve anxiety and stress,” he said, “I’ve been a big believer in massage for natural relief and muscle body issues.”

Paul came across the Hand and Stone business model and said he was impressed.

“When I met with corporate leads they seemed to really know the business and had franchises of their own,” he said. “I liked the brand services and business model they offered and decided it was for me.”

One-time franchise fees can range between $20,000 and $60,000; Paul’s initial fee was $39,000, but he received a 20 percent discount for his military service, saving around $8,000, he said.

“Veterans should take advantage of low interest rates, SBA loans and be sure to look at the working capital number on the franchise disclosure document with scrutiny,” he said. “The capital piece drives how much you should take out in loans and is the most ambiguous number with the FDD. Reach out to corporate leaders or attend an informational session for further analysis.”

While on active duty, Paul served as a Green Beret in the Army and worked on military training programs for armies in Africa; he is now a colonel in the National Guard.

“When people transition from the military, it can be stressful getting a business up and running,” he said.

“[But] owning a franchise or your own business provides a freedom that you won’t get going to work for another company.”

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