The untapped “sweet spot”: veterans in franchising

The untapped “sweet spot”: veterans in franchising

Over 550 companies have joined the VetFran network, but Radim Dragomaca wants more franchisors to enlist in America’s leading reintegration program

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“There’s one thing in franchising that really hits the sweet spot: a franchisee executes a standard operating procedure for success,” says Radim Dragomaca, director of the VetFran program at the International Franchise Association (IFA). “This is exactly what you learn to do in the military.”

Dragomaca’s passion for getting veterans into the franchising world is immediately apparent, but the program began many years before his involvement. Founded in 1991 by Don Dwyer Sr., chairman of the Dwyer Group (now the Global Franchise Award-winning Neighborly), VetFran was originally created to help reintegrate veterans of the Gulf War back into the civilian ecosystem. As Dragomaca explains: “He [Dwyer] thought, ‘veterans would be great in franchising, but there are no resources for them, no outreach for them, and no acknowledgement of the service that they made to their country’. Oftentimes, as part of that service, they forewent the kind of money that they could have made in the private sector.” VetFran filled this support void by enabling veterans to start working for themselves.

But the VetFran message is also one of education. Veterans, like many newcomers to the franchising industry, may be unaware of what’s on offer: “What they might not realize is that running a haircutting franchise, for example, doesn’t require them to be an expert in haircuts; it’s not them in the store, cutting hair,” says Dragomaca. “You just need to have the mindset, entrepreneurial spirit, and business basics down – some veterans aren’t thinking about that. So my job is to go around the country and educate them on the opportunities available.”

Semper Fi
Since its conception, VetFran has grown into a detailed network of brands broadening the career prospects of veterans returning from overseas deployment. Member franchises must offer discounts for veterans, which can vary from a percentage reduction to a complete forgoing of the fee.

“In addition to discounts,” explains Dragomaca, “there are quality criteria that the companies have to meet, that go above and beyond what the IFA itself requires. These scale up as you go to the higher tiers of membership, but essentially these include the number of years in business, number of units open, and at higher levels, things like the continuity rate of your units; franchises require a continuity rate of 80 per cent or higher, for top-tier membership.”

The tiered star system that VetFran incorporates into its membership structure allows veterans to make educated decisions about which brands they want to go into business with. Franchises will either be rated one, three, or five stars, depending on an assortment of ranking criteria.

“The IFA finds through its research that a number of companies don’t necessarily survive past three to five years, or buy back their units and abandon the franchise model,” says Dragomaca. For veterans joining a franchised business, the process of having everything stripped away because a brand doesn’t succeed could leave them feeling dejected. With the star system, rather than an IFA membership and a standard buy-in being the only criteria to join VetFran, veterans can trust their investment. But there’s always room for improvement: “I’m sure there’s a way to improve the criteria so we can identify the absolute gems – that we know even a year or two in are going to succeed – but until we figure out how to do that, the star system is the safest and most logical way to scale up tiers.”

Enduring appeal
But why specifically target veterans? As Dragomaca states: “there are some things universal to the veteran skillset that apply to franchising, such as leadership, tenacity, hard work, dedication, and mission-orientation.” Veterans have a focused mindset that makes them perfect for the system-execution methodology which franchisors are looking for. “When you become a franchisee, you take over a concept and the methods of operating that concept. We find that it’s a natural fit.”

“There are some things universal to the veteran skillset that apply to franchising”

And veteran hiring has been on the up: according to the Society for Human Resources Management Foundation (SHRM), around 11m U.S. veterans are a part of the civilian workforce; a number expected to rise by another one million by 2020. Notably, 14 per cent of franchisees in America are veterans. While impressive, this number is only set to climb even higher: “Each one of the individuals in that 14 per cent is a hidden amplifier for veteran hiring,” says Dragomaca. “They tend to gravitate towards the people who have the same kind of life experience that they do. We call it a ‘hidden engine’ for veteran hiring.”

Looking ahead
This hidden engine is a big part of VetFran’s plans for the future. “VetFran was always focused on the veteran before they became a franchisee, and the veteran as they become one,” says Dragomaca. “Once they become a franchisee, they disappear from the VetFran orbit. Poof, success story. Nothing else to see here, folks.”

But this is set to change, as VetFran will soon launch brand-new opportunities for veteran entrepreneurs to connect with their peers and maximize their potential. Franchisee maps, exclusive events, and targeted op-eds are just a handful of the offerings VetFran is keen to present to veterans who want to become a more active part of the program’s vast network.

Veterans aren’t the only ones benefiting from VetFran’s growth plans, however. An upcoming military caregiver initiative will support the spouses of veterans, often affected just as deeply by the need for civilian reintegration. Dragomaca, dissatisfied by responding to queries from spouses with an explanation of the standard VetFran offerings, looked into what more the program could offer. This led to a conversation with the Elizabeth Dole Foundation; an organization empowering military families.

“There’s going to be a new initiative that focuses on employment, mentoring, and resource-sharing for military caregivers,” says Dragomaca. “There are about 5.5m military caregivers in the U.S. They’re not always spouses, but they often are; caring for a wounded or disabled veteran – and we want to help them. We’ve put together a coalition of 18 homecare companies, and it’s a natural match between these two communities: one is a chronically underemployed group, and the other is a wonderful, growing sector that has come together and said: ‘we want to help them’.”

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