Investing in a franchise business is the perfect way for recently retired veterans to stay active and engaged with a purpose-driven mission that offers them a financial reward. However, there are many questions raised by veterans when it comes to franchising. The International Franchise Professionals Group (IFPG) is a membership-based franchise consulting network with more than 1,300 franchisors, franchise consultants and vendor members. Together, our franchise broker group members guide aspiring business owners through the process of identifying and investing in franchise businesses.
In this article, we answer some of the frequently asked questions by veterans when it comes to investing in a franchise. We analyze the nature of operations, know-how and considerations a veteran should have in mind before investing in a franchise. It is important for us to shed some light on the facts and scenarios so that the veteran can make an informed decision about an investment that best suits their needs.
What is Franchising?
Franchising is the process of granting permissions, usually between a company and an individual, for a veteran to operate a certain business identified by the company as a franchise opportunity. The franchise owner pays an initial one-time fee as well as recurring royalty fees. In return, they receive the right to operate under the company’s name and utilise the company’s products, services, and systems. The franchisor, or the company, offers their franchise owners an opportunity to establish a successful independent business with a protected brand and identity.
How Do I Invest in a Franchise?
The process of investing in a franchise is quite straightforward for veterans. After selecting a franchise to invest in, veterans will be required to research the company by studying their business model, products, and services. After this, they will need to submit an application and may be subject to a background check in order to ensure their suitability to be a franchisee. Once approved, they will pay the startup fees, which includes the cost of the franchise fee and any additional costs. Then they can begin the process of setting up the franchise and running it.
What Are the Benefits of Investing in a Franchise?
There are a number of benefits associated with investing in a franchise, which makes it an attractive option for veterans. Firstly, the franchise offers veterans a secure business opportunity since they are already established and have a brand with a good reputation. This means that veterans will be more likely to succeed with their business than if they were to start an independent venture from scratch. Furthermore, they can also take advantage of the knowledge and experience that the franchisor has accumulated over the years. Veterans are also likely to benefit from access to the franchisor’s marketing and advertising materials, as well as training and support.
What Should I Consider When Choosing a Franchise?
There are numerous factors that veterans should consider before investing in a franchise, such as the nature of the operations, the required start-up costs, the need for specialized skills and knowledge, the statutory requirements and the need for additional investments in the short and long term. Additionally, they should consider the quality of the franchisor’s training materials and support services, the level of guidance they will receive from the franchisor and the investment’s impact on their ability to retire.
Are there any Tax Incentives for Veterans Investing in Franchises?
Yes, in fact, there are a number of tax incentives available to veterans who invest in franchises. The U.S. Small Business Administration’s Veterans Advantage Program provides business ownership opportunities to veterans and their spouses through preferential treatment in franchise opportunities. Additionally, veterans may take advantage of the Disabled Access Credit, which provides a refundable tax credit for businesses that make their facilities accessible to people with disabilities.
Investing in a franchise is a great way for veterans to stay active and engaged in a business. With all the information and training available, it is a venture that can be both rewarding and beneficial to veterans. However, it is always important to do your research and seek professional advice from a franchise specialist before making any financial commitment.