The Service Industry: Why Veterans Are Flocking to the Franchise World
Robert and Radiah Mallard manage a lot of buildings. And when a tenant in one of them has a broken window or a leaky faucet, the first thing the Mallards do is fill out a Form 5988-E.
Nowhere on the form is it called that. But the Mallards reflexively revert to the military jargon they used during long careers as U.S. Army logistics, maintenance and supply officers, including in Iraq and Afghanistan, where a 5988-Echo was the ubiquitous starting point for fixing anything, from a defective rifle to an out-of-commission truck.
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“We’re about standard operating procedures, just like everything in the military has a standard operating procedure,” says Robert Mallard, who, with his wife, opened a Property Management Incorporated franchise last year in Columbus, Ga.
That’s one of the surprisingly long list of parallels that have attracted disproportionate numbers of veterans to the franchising industry: the idea that they can be their own boss but also have an established structure and a clear plan of attack from headquarters. Franchising, like any business model, isn’t for everyone. Some entrepreneurs prefer to go their own way, and chafe against guidelines. But veterans often come with a different skill set.
“If you look at someone who’s very used to a structured system and you give them a venture like a franchise, they succeed,” says Misty Stutsman, director of the Center of Excellence for Veteran Entrepreneurship at Syracuse University. “They stick to the plan, and they understand why there’s not always a need to go changing things just to change things. That’s why a lot of veterans identify with the franchise idea: Someone’s already proven that this works.”
Some 14 percent of franchisees are veterans, according to the International Franchise Association’s VetFran program -- twice what the Veterans Administration says is their share of the American population -- and together they own some 66,000 franchises, according to an analysis by PwC. This cohort is also aided by targeted assistance from the government and franchises that offer financial breaks for veterans; Edible Arrangements, for example, slices $10,000 off the price of buying a unit, bringing it down to $20,000. “Franchises recognize that veterans are well-suited to this business model,” says Radim Dragomaca, director of VetFran. Edible Arrangements franchisee Maurice Welton was then able to cover the rest of the franchise charge with a fee-free U.S. Small Business Association loan for veterans.
That franchising carries a strong appeal to vets is no surprise to Tim Colomer, who worked as an explosives ordnance disposal technician in the Marine Corps and over the summer started as a JDog Junk Removal franchisee in Lake Houston, Texas. Running a franchise maps almost identically with military culture, Colomer says. “From boot camp to the rest of your career, there’s a very, very strong structure in place. We had rigid rules set up for safety reasons.” And just like the military, he says, franchising follows “a well-traveled path with past experience and performance that helps you accomplish your mission.”
Similarly, Army veteran Noiel Massey wanted to get into a business “where I could hit the ground running,” he says. He bought an Oxi Fresh Carpet Cleaning franchise in Columbia, S.C. “It’s already structured. I don’t have to do everything on my own,” he says. “They tell you, ‘This is what needs to happen,’ just like in the military.”
Still, veterans in the industry reject the suggestion that they’re only following orders. The franchisor “tells you what to do and how to do it. But you can do it your way, too -- find your niche, what works for you, what area you want to focus on,” Radiah Mallard says.
Like many veterans who go into franchising, Maurice Welton wasn’t just a grunt in the military. An Army cook, he rose to the rank of sergeant and worked as a food inspector. Now, as the owner of five Edible Arrangements franchises in South Texas, he says he has promoted himself to field general. Leading employees, Welton says, is the same as leading troops. “You have a common goal. If your job is to cut the fruit, cut it. If your job is to dip the strawberries, dip them. If your job is to take the orders, take the orders.”
Having served, many of these entrepreneurs and employees are trained to be precise, focused, conscientious and able to improvise when needed. And yet, in interviews with a number of veterans turned franchisees, an even richer picture develops -- of a culture in which unexpected parts of military experience translate into franchise success, and where community has been able to form in unexpected ways.
“My guys are absolutely aggressive when it comes to details -- our knowledge and understanding of chain of command and how things work,” Colomer says. On the weekends they drink beer and play pool together. “But when we’re at work, we’re at work.”
Masters of bureaucracy
Veterans say their military service gives them experience with something else many civilians find overwhelming: the massive amount of regulatory red tape they often face as franchisees.
“Everybody has their processes and things they need done to be in compliance. And the military is all about compliance,” says Robert Mallard, the property manager. His business must be registered with the secretary of state and licensed in multiple ways to deal with things like real estate and handling money. “Compliance to me is kind of similar to military regulation -- everything needs to be structured and completed in a specific way. You have to be able to balance your budget and make sure you have everything from toilet paper to fuel for your vehicles. You have these strict guidelines to abide by.”
In the military, “no matter what your job is, you’re constantly doing paperwork,” says Massey, who is also branching out into a restaurant. “Oh my God, there were so many forms to fill out and permits to get for that,” he says.
“We don’t like dealing with bureaucracy,” says Brian Hannon, an Air Force veteran and operations manager at a Signal 88 Security franchise in Sarasota, Fla. “But service members have learned to cope with it.”
Veterans hiring veterans
Veterans often have challenges transitioning back to civilian life, but many have used franchising as a bridge: Through a business, they can serve as a civilian but also work with other veterans. Veteran-owned franchisees are 30 percent more likely than civilian-managed ones to hire fellow veterans, a VetFran survey found. Seventy percent of them report having hired or recruited veterans or spouses of veterans in the past year.
“The franchise model works for veterans because you join back into that close-knit camaraderie we’re used to,” says Hannon, who says he goes out of his way to recruit employees with military service, including homeless veterans.
Welton has found a lot of solace in that connection. He’d struggled with readjusting to civilian life; no one had his back, he says. To keep that from happening to others, he now seeks out veteran employees. It’s a brotherhood, he says. “We know that transitioning from the military to civilian life is tough. You want to take care of your brother who just got out.”
“There’s a cult of personality that we have,” says Colomer, who recovered from head and spine issues he suffered when his vehicle ran over an improvised explosive device, and now serves as an advocate for, and mentor to, other wounded veterans. All his employees are former military, including a vice president of operations -- who is Colomer’s best friend from the Marine Corps. He plans to hire 85 veterans as he expands in the next five years.
Hannon also applies that sense of camaraderie to hiring fellow veterans. “I would hire a brother over anybody else,” he says. One of those, Marine Corps veteran Steven Stouffer, was homeless when Hannon offered him a job. “I felt like I was back with a team, as in the military,” Stouffer says. “I felt I was refocused. We’re all on the same page. We think alike, work alike.”
That culture, as you would expect, also leads to a lot of soldierly lingo being bandied about in franchise workplaces. When Colomer’s trucks are on the move, they’re “Oscar Mike.” (Most of the rest of their military patter “is pretty profane, to be honest,” Colomer says.) When one of his deliveries is late, says Welton, he calls it a misfire. Massey says he sometimes has to check himself when “Roger that” comes out of his mouth in front of customers of his carpet-cleaning service. “They just look at me funny.”
None of this is to say that veteran franchisees are necessarily fresh out of the service. There are 21.2 million veterans in the U.S., and they own 2.5 million businesses, the Center of Excellence for Veteran Entrepreneurship says. That works out to 13 percent of the nation’s business owners. Veterans are 45 percent more likely than civilians to be self-employed. And like civilians, many of them have already dabbled in other professions after leaving military service but before going the franchise route; the median age of new franchisees is 50, according to VetFran.
Many “look at it as like a third career. They have the skills they learned in the military, and now they have some real-world civilian experience,” Stutsman says.
Colomer, for instance, worked for Halliburton as director of explosives, with roughly 140 managers reporting to him across 74 locations worldwide, before getting itchy. Veterans “don’t like sitting in an office, in a cubicle,” he says. “I can’t be sitting at a desk all day waiting for a bottom line.” So he quit and went into franchising, bringing with him a background that combines deep empathy for the struggles of returning veterans, but also an abundance of real-world civilian and business wisdom he can pass down to his employees.
A community at home
Veterans’ camaraderie extends to the towns in which many of these franchisees elect to set up shop. They often choose to be near or even on military bases. The largest numbers are in California, Texas and Florida, which have the first-, second- and fifth-highest (after Virginia and North Carolina) concentrations of military personnel. Massey’s business is near Fort Jackson; the Mallards serve the area around Fort Benning.
“There’s that sense of community and belonging,” Stutsman says. “If you look at a lot of veterans, of course that’s where they want to be. They have a network.”
Dragomaca recalls one veteran who began his franchise venture with some Dunkin’ Donuts stores in Maryland but decided to expand four states away, in Tennessee. “He said, ‘I’m opening in the vicinity of military communities, where I feel close affinity and I feel comfortable serving,’” Dragomaca says.
There is also a practical reason for veteran franchisees to do business with fellow military members: They know how to. “It’s not just a comfort thing,” Radiah Mallard says. “We saw there was a need in the community to have a [property management] company that understood the military and could relate to the struggle and the stress and strain, and maybe ease that burden a little bit.”
She’s talking in large part about service members’ families who have to move a lot, or whose loved ones deploy overseas. “We understand how difficult that is, and maybe those who serve can relate to us more than someone who has never served.” Adds Robert Mallard: “They’re going to basically drop off their families and leave the country. We streamline the process to make it easier for them.”
The tight-knit families that often emerge from long deployments also make good franchise teams. “I’ve seen more husband-and-wife teams or family-run franchises than I do in the general small-business community,” Dragomaca says.
Two of the Mallards’ own four children are in the Army; the couple says they like the idea of giving their kids the option of working in the business if they choose. Welton isn’t waiting. He enlists his 14-year-old daughter to help out when his five South Texas Edible Arrangements locations get busy.
“When everyone fights together, everyone wins,” he says.
Filing the 026 report
When their eyes tire of staring at Form 5988-E, the Mallards can look up at inspirational posters they’ve hung on the walls of their office, similar to what often decorates military workplaces and barracks. “Vision,” “Integrity,” “Possibility" and “Dedication,” they say. “It was important to us to have these visual reminders of what our company represents, and we wanted our clients to see that when they came in and looked at the walls,” Radiah Mallard says. “If I had not been in the military, that wouldn’t have been something I’d have thought about.”
She excuses herself to fill out an update summarizing remaining repairs that need to be done. The Mallards call that a 026 Report -- same as in the Army.
As much as they complain about bureaucracy, veteran franchisees do seem to create a lot of it. Colomer has drawn up what he calls a Nine-Line, mimicking a Marine Corps work order so named because it has nine lines to fill out.
It’s among the many ways his military experience connects with managing a franchise, Colomer says.
“Especially in combat, we didn’t know when the next call was going to come in, where it was going to come from, what it was going to encompass. We’d get a call to come to one place, and in the middle of it we’d get called to someplace else miles away,” he says.
“That’s just like the junk-removal business -- minus getting shot at.”