Wilson says it was “a hard slog” for him, even though he did everything right. Scudamore gave him half of his franchise for free through the VetFran program, and Wilson had saved in advance for startup costs.
“I thought I had a lot of money, but I never dreamed how much it would cost to start. You have to buy the franchise. Then I had to buy vehicles. I had a family that had to live and thrive, and I had no income right away. You’ll reinvest all the money you’re making over the first two or three years. Take a strong look at your working capital so that you can provide for your lifestyle for a year or two. We worked hard and made it happen,” he says.
Also, keep a lookout for companies that offer special incentives on top of the VetFran program. CruiseOne has a contest, in which five free franchises are awarded to veterans who provide a business plan on how they want to run their businesses, says Tim Courtney, vice president of franchise development and ambassador of veteran affairs. The contest, in its third year, receives 300-500 plans annually, which all senior management teams read. It begins each Memorial Day, and winners are announced on Veterans Day. The company also reduces its franchise fee by 40 percent during the contest months. Many veterans opt to take the discount to get started immediately rather than wait for the contest results.
Contest winner Army Master Sergeant Grant Springer, who will be retiring this year, started up his CruiseOne franchise in November 2013. “We made profit, because we haven’t had to pay into the franchise fee due to the contest,” he says.
Study the Franchise Disclosure Document. “They are set up identical, whether it’s Dunkin’ Donuts or CruiseOne,” Courtney says. “Item by item, you can compare competitors: which one has a higher royalty, which one has different operating schedules. You can pick them apart. Don’t be rushed. Don’t be sold. If you’re being sold the franchise, something is wrong. If a deal is too good to be true, take a pause. Always call franchisees that are operating in the system and find out if they’d do it again, and make sure the franchise you’re looking at doesn’t have a high failure rate.”
Find a family-friendly franchise. Springer chose CruiseOne because it’s a home-based business with little overhead, and his wife was able to start it, even though he was still on active duty.
“How it works for us is, I do all of the marketing and the business side. My wife does the travel agent side. She’s the expert on where to go and does the reviews. She has put a lot of effort into being the face of it, dealing with the client. She’s there day to day. That’s how we’re able to balance it while I’m still in the military,” he says.
He adds that a home-based franchise is great for military spouses. “My wife is a big part of it with me. Every time I move, she has to change jobs. This is the kind of business I can take with me. When we retire and move, she can continue with the same clients and work, and there will be no loss of work time for her. It’s a great opportunity for military folks,” he says.
Heidi Lynn Russell writes about employment and business issues.