WASHINGTON – Owning a franchise operation is now more affordable for veterans, thanks to a program recently announced by Secretary of Veterans Affairs Anthony J. Principi.
The Veterans Transition Franchise Initiative, commonly known as “VetFran,” allows veterans to acquire a franchise with a downpayment of 10 percent or less of the initial franchise cost, which generally ranges from $45,000 to $150,000 for a small business. Franchising companies absorb the difference.
“Veterans are self-starters who possess an excellent work ethic. They are leaders who know how to manage others,” Principi said. “The VetFran program provides veterans who want to be in business for themselves a wonderful opportunity to get their feet in the door.”
Dr. Leo S. Mackay Jr., VA's Deputy Secretary, was the featured speaker at a Sept. 24 meeting of the International Franchise Association (IFA), VetFran's sponsor, to launch the new initiative.
Mackay also attended the annual convention in Orlando, Fla., earlier this year where the two organizations signed a Memorandum of Understanding (MOU) that they will work to promote franchise opportunities for veterans. IFA’s Chairman Jim Amos, President/CEO of Mail Boxes Etc, Inc., joined him in signing the MOU.
“I am convinced that the partnership we are embarking on is a win-win collaboration. It represents confidence in our nation’s veterans, benefits to our economy, and an investment in the future of America” said Mackay.
IFA first introduced VetFran in the early 1990s as a way for franchisers to express gratitude to military members for their service during the Gulf War. In the last several years, the program had all but been forgotten. The current war against terrorism has rekindled interest in extending franchise opportunities to military veterans.
A Hawaii veteran recently became the first to acquire a franchise under the revitalized VetFran program, obtaining a franchise for Expectec Technology Services, a technology supplier headquartered in Garden Grove, Calif. He paid $40,000 instead of the $60,000 he would have paid without VetFran.
Currently, VetFran is limited to franchises with initial investments up to $150,000, the maximum loan amount on which the SBA offers 85 percent loan guarantees. So far, nearly 75 franchisers are participating. VetFran may expand later to include franchises costing over $150,000, for which the SBA offers 75 percent loan guarantees. Additional information is available on VA’s Web page at http://www.vetbiz.gov/.
“When they one day put aside their uniforms, today’s servicemen and women must know that they will have real means and opportunities to pursue a career, and make a living for themselves and their families,” said Mackay. “This initiative helps provide that.”
