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Franchising Financing Options for Veterans
Special programs for veterans help them to acquire franchise businesses.
If you are a veteran interested in franchising but worry that it is not financially feasible, you should take a look at the financing options available to you. You might be surprised to learn how inexpensive some types of franchises can be. Owning your own franchise might be well within your reach.
The Cost of Opening a Business Franchise
Some franchises cost over a million dollars to get started, but many others cost considerably less. In fact, the International Franchise Association reports that 70% of franchise fees run less than $40,000. Keep in mind that in addition to franchise fees you might need to pay for stock and to rent or buy space for your business. Businesses with the lowest start-up costs tend to be the ones that can be run from your own home and that do not require you to purchase a large amount of stock to get started.
VetFran's Financial Help
You should not give up on franchising even if $20,000 to $40,000 is out of your price range. In 1991, the United States Department of Veterans Affairs teamed with the International Franchise Association to launch the Veterans Transition Franchise Initiative, or VetFran. VetFran partners with franchise businesses to encourage veterans to get started in franchising. To date, over 200 companies have joined the program. Participating companies offer veterans special financial incentives to acquire a franchise, generally 10% to 25% off the normal franchise fee. In the past four years over 400 veterans used the program to purchase their franchises.
Other Resources for Veterans Interested in Franchising
Veterans can seek out business help from several other sources as well. The United States Small Business Administration offers one-on-one small business counseling from members of the Service Corps of Retired Executives (SCORE). Members of this group can offer financial management advice to prospective franchisees. They may be able to help you look at your finances and find a way to come up with the money for your new franchise. Many new franchisees, including veterans, take out mortgages on their homes to pay franchise startup costs. SCORE counselors can also help you to find a franchise that fits your knowledge base, lifestyle, and budget. Their experience in business can greatly benefit you as you become an entrepreneur.
The Veterans' Business Outreach Center (VBOC) is another place to turn for assistance and advice. It specializes in helping veterans find small business resources in their cities, counties, and states. They also offer workshops and clinics for small business owners interested in learning more about specific areas of business. There are five headquarters of the VBOC located across the United States. Each one serves about 10 states.
Whether you are interested in owning your own auto parts, restaurant, or cosmetics franchise, franchisors are making it easier for you to get started. They know that veterans make responsible, talented, and successful franchisees. With the support of government and volunteer counseling programs, veterans can tackle meeting the financial pressures of starting their own franchises.
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