Franchises that Fit
Why home-based franchises are ideal for America’s returning veterans.
By Dan Fazio  

Even while he was serving in the Army, Marquis Neal knew he would someday own his own business. Such aspirations are not uncommon in the military – who wouldn’t love to be their own boss after serving in such a regimented world? For Neal, who enlisted at 25, the rigid structure of the military only strengthened the desire he’d been nurturing most of his life.

“It intensified the urge to become an entrepreneur,” said Neal, an OIF veteran who spent part of 2006 and 2007 coordinating and traveling in truck convoys in Iraq. “I’ve always had that in me. I’ve always wanted to work and do my own thing. But the military intensified that drive to actually do that.”

No Business Experience? No problem.
Now 36, Neal owns an i9 Sports franchise in Baltimore, a franchise concept that offers a variety of sports leagues to children ages 3 to 14. The former sergeant didn’t let his lack of business experience stop him from realizing his dream of owning a business. “Even though I had the want and desire to be an entrepreneur, I didn’t really have any business experience,” said Neal, who had earned a degree in electronics engineering technology before enlisting the Army. “So I figured it would be easier to actually go into a franchise system to gain a lot of that experience.”

Neal began researching franchise options in 2005 when he was working for a government contractor in Virginia, two years after he separated from the Army. The long commute from his home in Baltimore to his job in Virginia prevented Neal from attending his children’s after-school sports activities. “That’s when I ran across i9 Sports,” said Neal. “I’ve always been involved in sports. It’s something that I love – I have a passion for.”

Not worth millions? No worries.
The start-up cost for an i9 Sports franchise ranges from $44,900 to $69,900. Neal put savings from his OIF deployment toward the start-up cost, then financed the rest with a bank loan. Neal also took advantage of i9 Sport’s 10-percent discount off the franchise fee for veterans.

In November 2007, just two months after returning from his deployment to Iraq, Neal bought his franchise.

“Since then, I have had great success, with more than 1,200 kids enrolled,” Neal said. “My programs have been received very well by the community I serve and surrounding areas. When you get to see a kid who is 10 years old, who has never played, and has scored his first touchdown, that is the most rewarding feeling.”

Why Veterans Fit So Well
Franchising may be a career path many young veterans never considered. After all, many franchises that often come to mind – McDonald’s, Panera Bread and Subway, for example – require an initial investment of hundreds of thousands, even millions, of dollars. How many of America’s young veterans have access to that kind of money? With credit still tight, financing such sums to start a business can be difficult, at best.

i9 Sports is one example of franchise concepts that are better suited to America’s younger veterans. Franchises like i9 Sports don’t require a fortune to launch, and many can be operated from home. For more information on Military Friendly Franchises, visit www.militaryfranchising.com.

Brian Sanders, i9 Sport’s president and chief operating officer, said the franchise is a good fit for veterans, which the company recruits through the International Franchise Association’s VetFran program.

“In addition to the fact that we’re home-based and we’re a low-investment franchise, we have what’s called the Countdown to Game Time,” Sanders said. “We’ve laid out day by day and step by step everything they need to do to get their business up and running. And they flourish in our business model.”

Veterans make good franchisees because they know how to follow systems and procedures, Sanders said. They also have a drive to excel that gives them an edge. “Veterans do a great job being able to follow a formula and they’re serious about applying themselves,” he said.

Stealth Approach
Former B-2 Stealth pilot Brian O’Rear was well-prepared to buy a franchise when he retired from the Air Force in 2009. O’Rear, who flew a mission over Afghanistan the first night America struck back against terrorism in 2001, started studying franchise concepts years before he retired. He read franchise magazines, did research online and attended franchise conferences.

The fledgling home inspection industry caught his attention. “I realized that the home inspection industry was relatively immature, that it’s mostly filled with single-man operations and mom-and-pop type companies and that more professional companies are the wave of the future in this business,” O’Rear said.

After thoroughly researching three home inspection franchisors, O’Rear bought a Home- Team Inspection Service franchise in Louisville, Ky., in September 2009.

HomeTeam is another home-based franchise that requires a relatively low initial investment of between $39,300 and $70,500. O’Rear used a $50,000 Patriot Express Loan through the Small Business Administration to finance most of the $70,000 start-up cost for his business after he retired from the Air Force. He loaned his company the balance.

“That whole process was really, really smooth,” O’Rear said. “I think a lot of the military background helped because I was able to put together a nice tight business plan. I went and presented a business plan to the bank – it was a very easy sell.”

Teamwork
While O’Rear appreciated the low cost required to get his business off the ground, what really sold him on the franchise was the team concept embodied in the name. HomeTeam uses several specialists to inspect homes and commercial buildings, a concept that appealed to O’Rear as a former B-2 squadron commander during OIF. The team concept allows HomeTeam to conduct inspections quickly and thoroughly.

“That resonated with my military background,” he said. “I understand teams, I understand leadership. I understand the power of a team. That was a pretty easy sell for me.”

O’Rear is one of 14 veterans who own a HomeTeam franchise. Their success as franchisees has been impressive, and the company is looking for more veterans to recruit, said Jarid Kossen, vice president of franchise development. “It’s tremendously beneficial for them to get into as a low-cost business,” he said. “You have relatively low overheads. This can be started from home, and most people do. The other great aspect for a younger veteran is that most of these individuals are very driven – they have a lot of enthusiasm, and that’s what you need to make this business successful as well.”

House Doctors, a sister company that focuses on handyman/home improvements, is another home-based concept ideal for veterans, Kossen said.

Getting Started is a Snap
While many young veterans are attracted to home-based businesses, Greg Welch prefers his franchise on wheels. The former Army mechanic is one of 4,100 Snap-on franchisees who operate 4,575 vans – tool stores on wheels – worldwide.

“I always strive to be better,” said Welch, who operates in Painesville, Ohio. “I’m used to having a schedule and being on point. I’d recommend Snap-on to anyone with military experience.”

Welch, 26, joined the military after high school and spent four years at Fort Sill, Okla., before deploying to Iraq as a vehicle mechanic and recovery operator. He was recovering a Humvee when an IED exploded. Welch spent months recovering from his wounds at a hospital in Frankfurt, Germany.

“I just had to push through it,” Welch said. “It was my unit, my ‘battle buddies’ that kept me going. I knew they were out there, and I wanted to get back to them.”

A New Start
Welch did return to his unit to finish his tour. In June 2007, he separated from the Army and went to work as a mechanic in the trucking industry before deciding to investigate a franchising opportunity with Snap-on.

“I rode along with some franchise owners and took some time to make my decision,” he said. “It’s a change from being a mechanic to selling tools. I’m excited about the tools and excited to show customers all the new things we offer.”

While the initial investment required for a Snap-on franchise ranges from $150,614 to $289,080, the company does offer financing, as well as a $20,000 discount for veterans on the initial inventory purchase. Snap-on is one of more than 400 franchisors that actively recruit veterans through VetFran.

“Snap-on offers an opportunity with a proven system to run your business,” said Jon Rucker of Snap-on’s Military Veteran Program. “Those of us who have lived and worked in a military environment are used to ‘following a system,’ so I see a lot of veterans vectoring in this direction. A franchise business is a good fit for long-term, military veteran success.”

To research Military Friendly Franchises, visit www.militaryfranchising.com.

What’s the Forecast?
Franchise businesses are poised for stronger growth in 2011, according to a report prepared for the International Franchise Association (IFA) Educational Foundation by PwC. As the economy recovers from the “Great Recession,” the 2011 Franchise Business Economic Outlook forecasts a rebound in the number of establishments, jobs and economic output in the franchise industry.

The report estimates that the number of franchise establishments will grow 2.5 percent in 2011 from 765,723 – an increase of 19,079 new establishments. This growth will create an estimated 194,000 new jobs.

“The forecast of stronger growth in 2011 for franchise businesses is good news for our country,” said IFA President and CEO Stephen J. Caldeira. “When franchise businesses are stronger, so is our economy as a whole.”

Ranger Trained
Former Army Ranger finds a franchise that fits.
By Dan Fazio

Mike Starck is a veteran on a mission. An assistant manager at a “big box” fitness club for two years, the former Army Ranger grew tired of the high-pressure sales tactics often found in such environments. So in January, Starck became an Anytime Fitness franchisee and opened his own key club in Naperville, Ill., where his members can work out at their own pace whenever it fits their schedule.

“Anytime Fitness and I share the same vision: Improve the self-esteem of the world,” Starck said. “I wanted to give the community a different place to exercise, free from all the sales pitches and high pressure.”

For Starck, 30, who served with the 1st Ranger Battalion in Operation Enduring Freedom in 2002, the progression from an elite warrior to the world of fitness was a natural one. He worked as a certified personal trainer for a large fitness club for six years – including two years as assistant manager – after separating from the Army, saving his cash for the day when he could be his own boss. When he was ready, his plunked down the $40,000 in cash he needed to get his franchise off the ground. Then he called on his military training to do the rest.

“Military training taught me discipline, respect and the will to never give up,” Starck said. “A franchise gives veterans the opportunity to use the skilled learned in the military and implement them in a business environment. By using the skill learned in the military, their business will be set apart from the competition.”

Starck is one of 105 veteran franchisees who collectively own 220 Anytime Fitness clubs.

“We have found that military veterans typically have the physical fitness background, the work ethic, the discipline and the commitment to excellence to become very successful club owners and operators,” said Jeff Thames, chief operating officer and vice president of franchise sales for Anytime Fitness.

Anytime Fitness
www.anytimefitness.com/en-us
HQ: Hastings, Minn.
Founded: 2002
# of Franchises: 1,650
2010 Revenue: $22 million
Franchise Fee: $19,999 for veterans ($25,000 for all others)
Liquid Capital Required: $20,000
Total Initial Investment: $49,000-$300,000
Minimum Net Worth Required: None
Military Discounts or Incentives: $5,000 off franchise fee

About Anytime Fitness
What do people really want from a health club? That’s the key question Anytime Fitness co-founders Jeff Klinger and Chuck Runyon asked themselves seven years ago. The answer was relatively simple. When you boil it all down, people want a convenient and affordable place to go – with quality exercise equipment and a friendly atmosphere.

Thus was born the Anytime Fitness franchise – an alternative to over-sized and over-priced health clubs – providing a viable business model for independent franchisees and affordable fitness options for hundreds of thousands of members nationwide.

i9 Sports
www.i9sports.com
HQ: Brandon, Fla.
Founded: 2002, began franchising in 2003
# of Franchises: 135
Franchise Fee: $19,900
Territory Fee: $5,000-$20,000
Liquid Capital Required: $50,000-$60,000
Total Initial Investment: $44,900-$69,900, including franchisee fee, start-up costs, marketing, supplies, and three months of working capital.
Military discounts or incentives: 10% off franchise fee

About i9 Sports
Founded in 2003 by Frank V. Fiume,

i9 Sports is a youth sports franchise, offering flag football, basketball, soccer, cheerleading, and other sports for kids ages 3 to 14. i9 Sports leagues put an emphasis on having fun and not on winning. Despite the economic climate, i9 Sports has more than 400,000 members in 750 communities nationwide. For more information on i9 Sports, visit www.i9sports.com.

About HomeTeam Inspection Service:
HomeTeam franchisees work with homebuyers, home sellers and real estate professionals to service home inspection needs.  Today, HomeTeam Inspection Service continues to expand throughout the United States by offering franchise opportunities.  For more information on HomeTeam Inspection Service, visit www.hometeaminspection.com.

House Doctors
www.housedoctors.com
HQ: Milford, Ohio
Founded: 1995
# of Franchises: 90+
Franchise Fee: $39,800
License Fee: $9,800
Liquid Capital Required: $35,000
Total Initial Investment: $86,000-$112,500
Military Discounts or Incentives: 25% off of $9,800 license fee

About House Doctors:
House Doctors is a professional handyman service for commercial property owners and homeowners. Every House Doctors handyman location is independently owned and operated. Today, House Doctors continues to expand throughout the United States by offering franchise opportunities.  For more information on House Doctors, visit www.housedoctors.com.

Snap-on
www.snapon.com
HQ: Kenosha, Wisc.
Founded: 1920
# of Franchises: Approximately 4,100 franchisees operate a total of 4,575 vans worldwide
2010 Revenue: $2.6 billion
Franchise Fee: $15,000 initially (then $102 a month ongoing)
Out-of-Pocket Start-Up Expenses: Range from $38,778 to $80,071 when using Snap-on franchise financing (includes $8,974 to $13,940 working/liquid capital)
Total Initial Investment: $150,614 to $289,080
Minimum Net Worth: $30,000
Gateway Franchise Investment: $17,925-$30,672 out of pocket; $17,925-$83,941 total investment
Military Discounts or Incentives: Snap-on participates in the International Franchise Association’s VetFran program and offers honorably discharged veterans a $20,000 discount on the initial inventory purchase for their franchise business.

About Snap-on
Snap-on Incorporated is a leading global innovator, manufacturer and marketer of tools, diagnostics, equipment, software and service solutions for professional users. Products and services include hand and power tools, tool storage, diagnostics software, information and management systems, shop equipment and other solutions for vehicle dealerships and repair centers, as well as customers in industry, government, agriculture, aviation and natural resources.  Products and services are sold through the company’s franchisee, company-direct, distributor and Internet channels.

Getting Started
Advice from veterans who did it.

Marquis Neal
Franchisee: i9 Sports
U.S. Army Reserve (2000)
U.S. Army (2000-2003)
MOS: Transportation Management Coordinator (88N)

1. Write a business plan.
2. Make sure your home finances are in order so you do not put your family at risk.
3. Make sure you are doing something you like because you will not be so likely to quit when things get tough. Things will get tough and not go according to plan.
   

Brian O’ Rear
Franchisee: HomeTeam Inspection Service
U.S. Air Force (1987-2009)
AFSC: B-2 Bomber Pilot (11B3B)

1. Thoroughly research the parent company and the industry; pay particular attention to the relationship between the franchisor and the franchisees and make sure the relationship is truly symbiotic and supportive.
2. A franchisor will recommend you contact a handful of franchisees to get a feel for the business. These are the shining stars and will be very upbeat and positive about business. Make sure you also call a random sampling of the others to give you a glimpse of friction points.
   
3. Build a three- or four-year budget based on income and expense information from current franchisees. While not a guarantee, it will give you a very good idea of potential profitability and may help tip the scales one way the other.
   
4. It takes a couple of years for any business to establish, so make sure you are prepared financially for those lean years as the business builds.  Military retirees have a huge advantage over civilian counterparts in this regard since our pension allows us to reinvest much of the profit back in to the business and grow it more quickly.
   
5. Take your time. I very nearly bought a franchise after a four-month study. Ultimately I decided it didn’t fit our family’s plans, and I have often reflected on that decision not to buy as one of the best of my life.
   
6. Weigh the benefits of a franchise against going it alone. Franchises are more expensive up front, but they launch much more quickly and tend to produce positive cash flow (and successful owners) at a much higher success rate than those who begin “alone and unafraid”. Your military background prepares you very well for the decision-making and organizational skills, but in many industries the inside view is only attainable through time and experience – your own or that of your franchisor. 

Michael Starck
Franchisee: Anytime Fitness
U.S. Army (2000-2004)
MOS: Army Ranger (11B1V)

1. Learn how to manage cash flow.
2. Get with your local SBA rep and learn how business works.
3. Get a good accountant and attorney.
   

Greg Welch
Franchisee: Snap-on
U.S. Army (2003-2007)
MOS: Track Vehicle Repairer (63H)

1. Use the training and it will come naturally.
2. Stay organized.
3. Represent yourself professionally and you will rock.