Restaurants recruiting more veterans with franchise discounts

Nov. 10, 2011 | by Alicia Kelso
Restaurants recruiting more veterans with franchise discounts

According to a recent Small Business Administration study, veterans in the private sector are at least 45 percent more likely than those with no active-duty military experience to be self-employed.

The National Restaurant Association's analysis of U.S. Census Bureau data shows that nearly 10 percent of restaurants in the U.S. are at least 50-percent owned by military veterans. Veterans are majority owners of 33,864 restaurant businesses, and half-owners of 31,805 restaurant businesses, totaling nearly 65,700 restaurants total.

"America's restaurants are also a stronghold of entrepreneurial spirit and opportunity, and veterans are finding both in the nearly 66,000 restaurants that are owned by former military personnel," said Dawn Sweeney, NRA president and CEO.

Many veterans are drawn to entrepreneurship because there are parallels between being in the military and owning a business, said Sean Falk, a former U.S. Marine who served more than eight years in active duty and reserves. Falk now owns 10 franchised restaurants including Pretzelmaker, Mrs. Fields, Salsarita's and Great American Cookies.

Falk said the restaurant industry in particular is a good match for veterans because of the operations-based business model and relatively low entry costs.

"You don't need specific experience being a baker or how to bake a cookie. Most franchisors are just looking for someone who has leadership, determination and operational skills," he said. "The franchisor already has figured out how to run the business. Most veterans have the right skills and know how to execute operations, they just need to learn the system."

Chains offering more incentives for veterans

There are plenty of restaurant franchisors that offer special ownership incentives specifically for veterans, from Little Caesarsto Great American Cookies.

GFG, the parent company of Great American Cookies, Pretzelmaker and MaggieMoo's/Marble Slab, is hoping to recruit 150 veteran franchisees by 2014 through its program. Falk has been traveling the country to speak to veterans about potential ownership, and the company also has launched a series of webinars and other online educational tools about the program.

The program has generated so much interest that Great American Cookies recently extended its discount to 40 percent on franchise fees. The program initially featured a 15-percent discount.

"We've been thrilled with the initial response from service members to our new Great American Patriot program," said Chris Dull, president & CEO of parent company GFG Management LLC. "By increasing this special offer and adding additional learning opportunities we hope to make it even easier for veterans to start their own small business through a proven franchising model with an exceptional brand."

Subway also introduced a new program for veterans last year, waiving the $15,000 franchise fee for anyone who has been honorably discharged from the U.S. military who wishes to open a Subway restaurant on a government or military installation. Also, the franchise fee is reduced by 50 percent for any veteran opening a Subway unit at any non-military or non-government location.

More than 400 companies – many of them restaurants – participate in the International Franchise Association's VetFran program, which offers special programs just for veterans. VetFran began in the early 1990s, and has since grown to more than 1,200 franchisor members and 600 supplier members.

When Falk exited the military as a Marine captain in 1994, there weren't many of these incentive programs available. That has since changed dramatically for a few reasons, he said.

"We went through a quiet period in the 1970s through 1990s where there weren't a lot of conflicts. But there are now several wars and many more recognition efforts for veterans. There have been a lot of deaths and it's touched more people's lives. More people are supporting those coming back who need jobs and opportunities," he said. "More people are aware that they need to be taken care of when they come home."

He expects veteran franchise recruitment efforts to accelerate even more as tens of thousands of troops withdrawal from Iraq in the next year or two.

Tax incentive legislation passes Senate

Adding even more incentive, the United States Senate has passed legislation that would provide a tax break to businesses that hire unemployed veterans. The measure offers a credit of up to $5,600 for hiring veterans who have been looking for a job for more than six months, as well as a $2,400 credit for veterans who have been unemployed for more than four weeks. The measure was applauded by the National Restaurant Association.

"As the second-largest private-sector employer, America's restaurants provide 13 million jobs nationwide," said Scott DeFife, EVP of Policy and Government Affairs for the NRA. "The restaurant industry provides great opportunities for post-military culinary and management careers, as well as ownership opportunities, and with the right policies, such as small business tax assistance to hire unemployed veterans, we will be able to create even more jobs and provide greater opportunities."

Read more about franchising.

Photo provided by eschipul.

Topics: Franchising & Growth, Little Caesars, Operations Management, Social Responsibility, Trends / Statistics

Alicia Kelso
Alicia has been a professional journalist for 15 years. Her work with, and has been featured in publications around the world, including NPR, Good Morning America, Voice of Russia radio, and Franchise Asia magazine. View Alicia Kelso's profile on LinkedIn

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