Franchises lure military veterans

By Cyndia Zwahlen

Nov. 1, 2006 12 AM PT

Special to The Times

After completing military service, many veterans are being targeted by a new set of recruiters who, instead of pushing for another tour of duty, are touting small-business ownership.

Attracted to the self-discipline, work ethic and perseverance needed to succeed in the military, dozens of U.S. franchise companies are increasingly looking to former military personnel in their efforts to sign up high-quality franchisees.

And after years of following orders in the military, many veterans are ready to be their own bosses. They are also used to working within a system, a key skill for a franchisee.

“We just think it’s a perfect formula for success,” said Dina Dwyer-Owens, president and chief executive of Dwyer Group Inc., a Waco, Texas-based company that owns seven franchise brands, including Mr. Rooter, a plumbing service, and Glass Doctor, which sells and installs automotive, residential and commercial glass.

She is also chairwoman of International Franchise Assn.’s Veterans Transition Franchise Initiative, or VetFran, a program started by her father, Don Dwyer, during the 1991 Persian Gulf War. The program, which offers franchise-fee discounts to veterans, lapsed after Dwyer died in 1994 and was revived by his daughter four years ago.

In the first eight months of this year, 231 franchisers, including UPS Store, Dunkin’ Donuts and Molly Maid, participated in the program, up 30% from the same period last year, the franchise group said.

A total of 621 veterans bought franchised small businesses through the program in the first eight months of 2006, up 60% from a year earlier.

The Small Business Administration has boosted its veteran outreach efforts too. The agency estimates that it served 50% more veterans this year than last year.

“It’s grown fairly significantly,” said William Elmore, SBA associate administrator for veterans business development.

Former Marine Daniel Windler used a discount through the veterans franchise program to buy a Rainbow International Restoration & Cleaning franchise in the Imperial Valley in 2003. Keeping things spotless was drilled into him during his four years as a Marine, he said.

“The joke around the platoon always was, ‘If nothing else, you can always be a janitor when you get out of the services,’ ” the Yucaipa resident said. “I guess I took that literally.”

The Banning-based company, which he owns and operates with his wife, Barbara, has two employees and three vans. The Windlers say they have almost paid off their initial $40,000 investment, which was financed by Dwyer Group, the franchise concept owner.

The couple, whose teenage daughters also work in the office, has purchased for $250,000 the right to serve a second, larger Rainbow territory in Palm Springs and San Bernardino County.

Veterans own about 14% of all businesses with employees, according to the SBA. Of those who choose the franchise route, about 40% pick a lower-cost van-based concept such as Rainbow or Snap-on Tools.

The Veterans Entrepreneurship and Small Business Development Act of 1999 gave an official boost to veteran business development efforts by federal agencies, including the Department of Veterans Affairs and the SBA. The VA’s efforts focus on increasing the share of federal contracts won by veterans who own small businesses.

The SBA has set up five Veteran Business Outreach Centers. There is also a veteran business development officer assigned to each of the SBA’s 68 district offices.

VetFran is meant to make it easier and more affordable for veterans to buy a franchised small business. The franchisers in the program typically offer discounts of 10% to 30% off their initial franchise fees. The discounts reduce start-up costs by $3,000 to $25,000 or more.

Some franchisers have waived the entire initial fee for qualified veterans, including Snap-on Inc. of Kenosha, Wis., and HomeTask Handyman Service Inc. of Seattle, founded in 1997 by former Navy Petty Officer 3rd Class Jerrod Sessler. That’s $7,500 in savings for veterans who join Snap-on’s tool business and $15,000 for a qualified HomeTask franchisee.

VetFran also offers veterans free admittance to franchise expos, such as the West Coast Franchise Expo at the Los Angeles Convention Center this weekend (www.wcfexpo.com).

Choosing to buy a franchised small business instead of opening an independent venture can address some of the concerns veterans may have about running their own business.

“If we have a weakness, it’s the business side, and franchising helps you take care of that weakness,” said Chuck Southern, a veteran and corporate opportunities specialist at the VA’s Center for Veterans Enterprise.

That’s why Kenneth E. “Rusty” Roberts Jr., a former Marine, converted his independent automotive glass business a year ago to a franchised Glass Doctor.

To get started, Roberts took out a second mortgage to raise the $50,000 franchise down payment and $100,000 for vans, glass racks and office equipment. He credits the Glass Doctor operating system for filling in some of the gaps in his business skills.

Sales for the business, based west of Fresno in Kerman, Calif., hit $400,000 its first year. His old company posted sales of $150,000 in its best year.

“You’ll hear a lot about the system, ‘If you follow the system, you’ll be OK,’ ” Roberts said. “I’m not saying that it’s easy. It’s not. It’s very hard. But if you follow it, you will be all right.”

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On the Web

Business resources for military veterans:

* International Franchise Assn., VetFran program

www.franchise.org

* National Veterans Small Business Conference

www.nationalveteransconference.com

* U.S. Department of Veterans Affairs

www.vetbiz.gov

* U.S. Small Business Administration, Office of Veterans Business Development

www.sba.gov/vets