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Veterans in Franchising Prepared by Franchise Business Review for the International Franchise Association

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Veterans in Franchising Prepared by Franchise Business Review for the International Franchise Association 2013 A Progress Report Veterans in Franchising Prepared by Franchise Business Review for the International Franchise Association A report on the results of Operation Enduring Opportunity, a campaign of the International Franchise Association’s VetFran Strategic Initiative For more information please contact: International Franchise Association 1501 K Street, NW, Suite 350 Washington, DC 20005 (202) 628-8000 www.vetfran.com Embargoed until 10:00 am, Tuesday, November 5, 2013. • 97 percent of franchisees surveyed believe that veterans EXECUTIVE SUMMARY are a good fit for employment within their franchise In 2011, the International Franchise Association (IFA) business. launched Operation Enduring Opportunity, the franchise industry’s campaign to hire as employees or recruit as franchisees, 80,000 veterans, wounded warriors and military BACKGROUND spouses by 2014. Operation Enduring Opportunity is built on IFA’s VetFran strategic initiative, which has worked to With nearly 1 million veterans transitioning out of make franchise ownership more accessible to veterans military service over the next five years, the International since 1991. Franchise Business Review was engaged for Franchise Association (IFA) answered First Lady Michelle the second consecutive year to conduct an industry-wide Obama’s call to assist in the transition effort through the survey between Oct. 3 and Oct. 25, 2013 to measure the White House Joining Forces initiative. On November 10, campaign’s progress. 2011, IFA President & CEO Steve Caldeira joined the First The survey found that the franchise industry has enabled Lady to announce Operation Enduring Opportunity, an over 150,000 veterans, military spouses and wounded unprecedented commitment by the franchise industry to hire warriors to start careers in franchising since 2011. In as team members and recruit as franchise business owners total, 146,365 veterans found employment since 2011 80,000 veterans, wounded warriors and military spouses across the 1,159 participating businesses, which include through 2014. Operation Enduring Opportunity expanded franchisors, franchisees, and franchising supplier companies. IFA’s VetFran strategic initiative, launched in 1991 to help Additionally, the survey showed an increase in veteran veterans of the first Gulf War, adding a hiring component franchise ownership, bringing the total of veteran franchise in addition to its original franchise owner development owners since 2011 to 5,192, for a total of 151,557 new mission, to address the immediate needs of returning veterans and military spouses in franchising since 2011. veterans. Veterans have a proud history of success and While it is impossible to account for every veteran that service in franchising. has found an opportunity in the franchise sector since According to an analysis of the 2007 Census Bureau January 2011, based on these representative survey samples, Small Business Owner survey by PricewaterhouseCoopers Franchise Business Review estimates that over 200,000 for the IFA, there were 66,275 veteran owned franchises, veterans have been hired as employees or recruited as new supporting 814,600 jobs, generating $139.3 billion in sales franchisees in the last 34 months alone. and contributing $41.6 billion in contributions to GDP, at that time. Methodology: The PwC study showed that the average veteran-owned Covering a range of industries, business models, and franchise businesses compared very favorably to all veteran company sizes in order to approximate the diversity of the owned businesses, generating average gross receipts of franchise sector, IFA franchise members were invited to $2.1 million compared to $445,487 for all veteran-owned participate in an on-line survey conducted between Oct. 3 businesses. Veteran-owned franchises also employed more and Oct. 25, 2013. The survey was composed, constructed workers (12.3) than the average veteran-owned business (3), and distributed by Franchise Business Review, which also indicating that veteran franchisees are stronger job creators compiled and tabulated the results. Approximately 21 than their non-franchised peers in business ownership. percent of franchisors invited to participate responded to the Since the launch of Operation Enduring Opportunity, over survey, and 12 percent of franchisees contacted participated. new 250 franchise companies have joined VetFran, for a total of over 600 companies now actively hiring and developing Key findings: veterans as franchise business owners. • 151,557 veterans have started careers in franchising since 2011. Why are veterans successful in franchising? • 5,192 veterans became franchisees among companies • Veterans acquire strong leadership skills and a thorough according to industry surveys. understanding of teams. Military experience includes • Veterans hire veterans. Veteran franchise owners were leading people, improving processes, and accomplishing 30 percent more likely to have hired a veteran than non- the mission. Just like in the military, in franchising, the veteran-owned franchise businesses. mission is accomplished by the team. • 36 percent of franchisors surveyed indicated that they • Franchises run on systems. Implementing systems and had hired at least one veteran/spouse of a veteran as a following procedures with precision, emphasized in corporate employee since 2011. military training, leads to success in franchising. • 32 percent of franchisees surveyed indicated that they • Franchises provide training. Veterans are trained and had hired at least one veteran/spouse of a veteran since taught very specific skills to be used to carry out very 2011. specific tasks. Franchises have comprehensive training • Most popular franchise industries among veterans and support built into their opportunities. This means a coming into franchising include Automotive (16%), veteran can enter into a completely new field, follow General Services (15%), Food (15%), Residential/Home the franchisor’s proven business model, and receive the Services (11%), and Business Services (8%)*. (Based training, guidance, and support a new business owner on an independent Franchise Business Review survey needs to succeed. of 739 veteran franchisees that purchased a franchise • Franchises offer support. In franchising, veterans are within the last 2 years, completed 9/30/12.) business “for” themselves, but not “by” themselves. 1 SURVEY RESULTS • Ethnicity – Of franchisees surveyed, 80 percent indicated that they are Caucasian, 8 percent Asian, 4 Results include survey findings from franchisors, percent Hispanic, 2 percent African American, and 7 franchisees and suppliers, as well as veteran satisfaction and percent Other. performance statistics from Franchise Business Review: • Education – 56 percent of franchisees surveyed indicated that they held a bachelor’s degree or advanced degree. Key Findings from the Franchisee Survey • 32 percent (293) of franchisees surveyed indicated that Key Findings from the Franchisor Survey they had hired at least one veteran/spouse of a veteran • 36 percent of franchisors surveyed indicated that they since 2011. had hired at least one veteran/spouse of a veteran as a • The most popular industry sectors for hiring of veterans/ corporate employee since 2011. spouses of veterans by franchisees are food (33%), • Franchisors stepped up efforts to recruit veterans as Automotive (20%), Residential/Home Services (10%), franchise owners, bringing the industry total to 5,192 General Services (9%), and Commercial Services (7%). new veteran franchise owners since 2011. • 97 percent of franchisees surveyed believe that veterans • Most popular franchise industries among veterans are a good fit for employment within their franchise coming into franchising include Automotive (16%), business. General Services (15%), Food (15%), Residential/Home • Nearly half (49%) of franchisees surveyed did not know Services (11%), and Business Services (8%). Based on an whether or not their franchisor was a member of VetFran independent Franchise Business Review survey of 739 or not, while another 24 percent indicated that their veteran franchisees that purchased a franchise within the franchisor was NOT a VetFran member. last 2 years (completed 9/30/12). • 80 percent of franchisees surveyed are NOT aware of • 79 percent of franchisors surveyed indicated that the any special tax credits available to employers that hire total number of veterans being recruited into their veterans. company has increased in the last 34 months. 31 • 70 percent of franchisees surveyed indicated that percent said the rate has increased significantly in the they are single-unit operators, and the remaining 30 last 34 months. percent indicated that they are multi-unit operators. Not • 98 percent of franchisors surveyed indicated that surprisingly, multi-unit operators were nearly twice as veterans are a good fit as employees. The 2 percent of likely to have hired a veteran as single-unit owners: 40 franchisors indicating that veterans were not a good fit percent of multi-unit operators indicated hiring at least were brands that did not require any employees. one veteran, vs. only 23 percent for single-unit owners. • 97 percent of franchisors surveyed indicated that • 22 percent of franchisees surveyed indicated that they veterans are a good fit as franchisees within their are veteran business owners themselves. The research company. Of the 3 percent that indicated that veterans results also showed that veteran franchise owners are 30 were not a good fit to
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