Why These Three Brothers Moved to San Antonio to Open a Pair of Franchises

Why These Three Brothers Moved to San Antonio to Open a Pair of Franchises

Why These Three Brothers Moved to San Antonio to Open a Pair of Franchises

Image credit: Two Men and A Truck | Facebook

Franchise Players is Entrepreneur’s Q&A interview column that puts the spotlight on franchisees. 

Would you relocate to open your own business? For Kevin, Curtis and Steve Newman, the decision to move to San Antonio to do just that simply made sense. Originally from Des Moines, Iowa, the three brothers decided to buy a franchise together. When a pair of Two Men and a Truck locations were available in San Antonio, the trio decided to make the purchase. Here’s what they’ve learned.

Name: Kevin Newman, Curtis Newman and Steve Newman

Franchise owned: Two Men and a Truck in San Antonio

How long have you owned a franchise?

We began running our first franchise on Dec. 8 and took over our second franchise on Dec. 22.

Why franchising?

Franchising allowed us to become business owners without jumping into the business world alone. With franchising, there is enough structure to give us the necessary support we need to get on our feet while allowing us enough freedom to develop and grow our own business. The ongoing support from other franchisees and home office also allows us to share best practices. Many of the strategies we plan on implementing came from fellow Two Men and a Truck franchisees. We never would have had this assistance if we had not chosen to purchase a franchise.

What were you doing before you became a franchise owner?

  • Kevin: Before becoming a franchise owner, I studied at the University of Iowa and obtained a BBA in Finance. After college I worked for Aviva Investors on their data management team and Wells Fargo in their Home Mortgage department.
  • Curtis: I received an accounting degree from Coe College where I also played on their tennis team. I then spent some time as a tennis pro and a finance manager at a car dealership before pursuing entrepreneurship options.
  • Steve: Prior to Two Men and a Truck, I practiced law and invested in real estate.

Why did you choose this particular franchise?

We decided to partner up with Two Men and a Truck because every franchisee we spoke with said they would invest with Two Men and a Truck again. Also, Two Men and a Truck fit the criteria we were looking for in a business. For us to invest, the business must be scalable, be a manager driven model, and cannot be replaced by technological advances.

We decided to invest in the San Antonio area because of its population growth and potential. When we discovered we had a chance to own two franchises in San Antonio, we leaped at the opportunity. Of course, the weather in Texas also doesn’t hurt!

How much would you estimate you spent before you were officially open for business?

That is a tough question to answer, as a lot of our costs relate to the purchase of two businesses rather than opening up a new franchise. One should expect to spend between $2,000 to $5,000 on legal and due diligence and another $5,000 on qualifying for an SBA loan. Additional costs such as rent, security deposits, uniforms, supplies, equipment, and inventory also need to be addressed. Another cost most people do not think about is paying yourself for your time as you hire employees, finding a location for your business, and getting the business ready to be opened.

Where did you get most of your advice/do most of your research?

Our primary mediums for advice at this point are other franchisees and our contacts at home office. Their advice and insight has been an enormous amount of help to us. We also lean on advice from our family and friends. We know that without their support this would not be possible nor as enjoyable.

What were the most unexpected challenges of opening your franchise?

All of the little things. No matter how prepared we think we are there always appears to be something left to surprise us.

What advice do you have for individuals who want to own their own franchise?

Remember why you wanted to become a franchisee. It can be easy to lose track of why you are in this line of work when problems pile up but it’s important to take time to remind yourself it’s worth it.

What’s next for you and your business?

The next step is actually starting to run the business. We’re all excited to expand the Two Men and a Truck brand and see what the future brings.


After Being Diagnosed With Cancer, This Entrepreneur Decided to Go Into Business With His Dad

After Being Diagnosed With Cancer, This Entrepreneur Decided to Go Into Business With His Dad

After Being Diagnosed With Cancer, This Entrepreneur Decided to Go Into Business With His Dad

Image credit: Ritter’s Frozen Custard.

Franchise Players is Entrepreneur’s Q&A interview column that puts the spotlight on franchisees. 

When Logan Moore was diagnosed with cancer soon after graduating college, he and his father, Michael, weren’t sure how much time they had left together. The pair had always wanted to start a business, and now worried they may not get the chance. When Logan beat cancer after several months of treatment, they decided it was the right time to start looking at business opportunities. Ritter’s Frozen Custard was the perfect fit – not only for its business model, but also because of the memories the father and son shared at the chain. Here’s what they’ve learned.

Name: Michael and Logan Moore (a father-son duo)

Franchise owned: Ritter’s Frozen Custard in Frisco, Texas. This location is scheduled to open in June 2015.

How long have you owned a franchise?

We signed for our 10-unit deal in January 2015 and will open our first location in June 2015.

Why franchising?

Franchising provides an opportunity for entrepreneurs to become their own business owner with a more cost effective route. Franchising also comes with a corporate support team that will help set you up for success. It’s like having a team of expert consultants working for you at all times at a fraction of the cost.

What were you doing before you became a franchise owner?

I worked in the banking and financial services industry for 29 years before deciding to open with Ritter’s. My son and co-owner, Logan recently graduated from college and has worked in the restaurant industry for three years.

Why did you choose this particular franchise?

To our family, Ritter’s is not just a frozen custard shop. It has an established place in our memory. We are originally from Indiana, and my wife and I used to take our children to the Ritter’s location on 116th Street at least once a week. It was our go-to ice cream shop after the movies, park or a Saturday stroll. It was at this Ritter’s location that I began to think about owning a Ritter’s of my own.

Several years later, my family moved to Texas where we searched for a place similar to Ritter’s to once again establish as our go-to frozen custard spot, but we never found one.

My son, Logan, was then diagnosed with cancer. After beating all odds, Logan and I decided it was time to go into business for ourselves. After thinking of all of our nostalgic memories shared at Ritter’s we decided we wanted to bring those memories to Dallas/Ft. Worth and signed with the brand.

How much would you estimate you spent before you were officially open for business?

I will spend approximately $500,000 for everything. Costs included a franchisee fee of $25,000; $200,000 in equipment; and lease improvements will be about $150 to $200,000. The rest of the money will be spent towards hiring, training and marketing for the first year.

Where did you get most of your advice/do most of your research?

After spending so much time at Ritter’s in Indiana we knew a lot about the brand already. However, when it came to finding more about the franchising opportunity we decided to speak with other Ritter’s franchisees and visited several other locations and the corporate headquarters before making our decision.

What were the most unexpected challenges of opening your franchise?

Finding the perfect location to fit everything the Ritter’s brand stands for was a difficult challenge. We took into account the amount of traffic, access to entrances, room for a drive-thru, square footage, visibility and finding an area that was a mix between commercial and residential buildings.

What advice do you have for individuals who want to own their own franchise?

Try to fund your business without debt if possible. This will make your break even come quicker and also provides more options for you later if you choose to expand.

What’s next for you and your business?

We want to grow Ritter’s in the Dallas/Ft. Worth area and hope to be the go-to frozen custard spot for families. We want kids to grow up knowing that premium custard is the best treat of all and the Ritter’s hamburger is a must compared to competitors.


Why These Two Boxing Club Franchisees Picked Franchising as a Path to Entrepreneurial Success

Why These Two Boxing Club Franchisees Picked Franchising as a Path to Entrepreneurial Success

Image credit: John Jarvis and Mike Confalone

Franchise Players is Entrepreneur’s Q&A interview column that puts the spotlight on franchisees.

For some businesses, two heads are better than one. That’s the case in TITLE Boxing Club’s location in Chicago’s Lincoln Park neighborhood. Business partners John Jarvis and Mike Confalone both had experience in the franchise industry when they opened up the boxing club together. Here’s what the duo has learned.

Name: John Jarvis and Mike Confalone

Franchise owned (location):  TITLE Boxing Club – Chicago Lincoln Park

How long have you owned a franchise?

Jarvis: I have been involved with franchising for five years. I have been a franchisee within the TITLE Boxing Club system for two years.

Confalone: TITLE Boxing Club of Lincoln Park has been open for eight months, but I have owned other franchises for a total of five years.

Why franchising?

Jarvis: I always had an entrepreneurial spirit and a knack for leadership. I am a strong proponent of following a process and felt franchising was a great route for me to pursue.

Confalone: It gave me an opportunity to branch off into other business ventures utilizing a proven business model. The great part of franchising is you have a built in support system and proven business model where a lot of the learning curve has already been done.

What were you doing before you became a franchise owner?  Jarvis: Before getting involved with the franchising I spent most of my career in sales and sales management within the healthcare industry.

Confalone: I recently sold a marketing company and still own a data management firm.

Why did you choose this particular franchise? 

Jarvis: I think first and foremost I liked the service TITLE Boxing Club offered; it is a fun, dynamic workout. From a business standpoint, I liked the processes they had in place and felt they could be replicated easily.

Confalone: I took a TITLE Boxing Club class and was immediately hooked on the concept and workout. I became a member and was so excited about the workout that my wife ended up joining as well. I then went to discovery day and had a chance to meet the founders and management team of TITLE Boxing Club and was impressed with open and honest nature of the dialogue, the support structure and the overall team attitude focused on making every club a success.

What were the most unexpected challenges of opening your franchise?  

Jarvis: The biggest challenge in franchising is getting the business opened. I have been a part of multiple build outs and each one is unique. There are always unforeseen obstacles and challenges.

Confalone: Finding a suitable location in downtown Chicago and negotiating the lease was by far the hardest part of getting opened.

What advice do you have for individuals who want to own their own franchise?

Jarvis: My advice may not be for everyone, but for me it is imperative to follow the process. Franchises have become what they are through their processes. The strongest, most successful franchisees are the ones who embrace the guidelines of the franchisor and don’t try to reinvent the wheel. My other piece of advice is the old business adage inspect what you expect. You can hire the best people and have countless conference calls but the only way you truly know what is happening in your business is to be in it.

Confalone: Do your due diligence. Talk to as many franchise operators as you can. Make sure you have your financing locked down tight and have surplus funding available. These things will help you sleep at night when unexpected expenses arise.

Also, have fun with it. Things are going to go wrong so learn to adapt and roll with the punches. Hire a great staff and empower them to do a great job. Finally, wake up every day with the goal to deliver the best experience possible to your members.

What’s next for you and your business?   

Jarvis: The next thing for our business is to continue to get better. There are always opportunities to improve on our processes, which ultimately makes for a better experience for our customers.

Confalone: I plan to open additional TITLE Boxing Clubs and will also look to expand my franchise portfolio beyond the fitness industry.


How Getting Fit Inspired Me to Become a Franchisee

How Getting Fit Inspired Me to Become a Franchisee


Leigh Hometh

Leigh Hometh
Image credit: Leigh Hometh

Like many franchisees, Leigh Hometh discovered her future franchise as a client. Hometh lost 30 pounds in six months as a Get In Shape For Women client, gaining energy and increasing her self-esteem. Soon, she decided she wanted to help others enjoy a similar experience. Here’s what she’s learned since becoming a fitness franchisee.

Name: Leigh Hometh

Franchise owned: Two Get In Shape For Women locations in Brookline, Mass.

How long have you owned a franchise?

Both opened in 2011, in March (Coolidge Corner) and May (Brookline Village).

Why franchising?

I was a client who had success with the program losing over 30 pounds in a six month period. The experience changed my life and I felt the desire to provide others with the same kind of empowering and successful transformation I had. I then researched the model, spoke to other owners and clients and became an owner.

What were you doing before you became a franchise owner?

I had a home renovation business.

Why did you choose this particular franchise?

I liked the personalized approach Get In Shape For Women takes with each client. Get In Shape For Women has provided an environment for women to receive the guidance, insight, and encouragement they need to attain their individual transformation goals such as increased strength, lowered body fat, and healthier food choices to improve health and weight management.

How much would you estimate you spent before you were officially open for business?

The primary cost was the build out including putting in HVAC systems, custom furnishings, electronics and gym equipment. The total was approximately $150,000.

Where did you get most of your advice/do most of your research?

Most of my advice was speaking to other clients, visiting other exercise facilities, other owners, and my own personal experiences with the brand.

What were the most unexpected challenges of opening your franchise?

Building a team of A+ employees took time and was a learning process, having never hired trainers or managers from this industry before. However, now we have team members with experience in exercise science, personal training, exercise science and nutrition certifications as well as a certified health coach from the Institute of Integrated Nutrition.

What advice do you have for individuals who want to own their own franchise?

I advise people to take their time gathering facts, understand the costs involved, and if possible work at another location to gain personal experience. Also, find something that you are passionate about and go for it.

What’s next for you and your business?

To continue to reach out to the community, develop a steady client base and help as many Brookline women as possible to get in the best shape of their lives.


Finance Your Franchise

Finance Your Franchise

This is it. You’re ready to begin your franchise dream. Only one thing is left: Finding the money you need.
 You’ve read the literature, done your due diligence, considered the statistics on success, and know a franchise is the way you want to get into business.

But before you sign on the dotted line, answer this question first: Where will you get the money to finance the franchise, royalty fees, inventory and working capital?

The first thing you want to do before approaching any lender is determine what your net worth is. To do this, use a personal balance sheet to list both your assets (what you own) and liabilities (what you owe). Under assets, list all your holdings–cash on hand, checking accounts, savings accounts, real estate (current market value), automobiles (whether paid off or not), bonds, securities, insurance cash values and other assets–then total them up.

The second part of the balance sheet is liabilities. Follow the same steps. List your current bills, all your charges, your home mortgage, auto loans, finance company loans and so on. Subtract your liabilities from your assets. Once you’ve worked up this sheet, take a good look at your credit rating. There are three common ingredients that all potential lenders look for in a credit rating: stability, income and track record.

Most lenders are interested in how long you’ve been at a certain job or lived in the same location, and whether you have a record of finishing what you start. If your past record doesn’t show a history of stability, then be prepared with good explanations. Not only is the amount of income you earn important but so is your ability to live within that income. Some people earn $100,000 a year and still can’t pay their debts, while others budget nicely on $20,000 a year.

Most lending institutions look at your income and the way you live within that income for one very good reason. If you can’t manage personal finances, the odds against you being able to manage your business finances are very good.

The third element lenders look for is your track record–how successful you’ve been in paying off past obligations. If you have a record of delinquent payments, repossessions and so on, you should get these squared away before asking for a loan.

Most lenders will contact a credit bureau to look at your credit file. We suggest you do the same thing before you try to borrow. Under the law, credit bureaus are required to give you all the information they have on file about your credit history. Once you have this tool, you should correct any wrong information or at least make sure your side of the story is on record. For instance, a 90-day delinquency would look bad, but if that 90-day delinquency was caused by being laid off or by illness, then that should be taken into consideration.

Business Plan

After you’ve determined your net worth and your credit rating, the final step to take before approaching lenders is putting together your business plan.

A well-thought-out business plan can make the difference between having your loan application accepted or rejected. A complete business plan should always include an intimate, technical study of the business you plan to go into; accurate pro formas, projections and cost analyses; estimates of working capital; an indication of your “people skills”; and a suitable marketing plan. It should also include certified statements of your net worth and several credit references.

If you’re unfamiliar with writing a business plan, seek professional guidance or check out business plan preparation software such as Business Plan Pro, or BizPlan Builder Interactive.

Financing From the Franchisor

Traditionally, the first place franchisees turn for financing is the franchisor. Almost all U.S. franchisors provide debt financing only. Some carry the entire loan or a fraction thereof through their own finance company. We found fractions of 15 percent, 20 percent and 25 percent, all the way up to 75 percent of the total debt burden. The franchisors we talked to emphasized that these figures are simply guidelines and not hard and fast limits.

In addition, the loans made by the franchisor can be structured a number of ways. Some offer loans based on simple interest, no principal, and a balloon payment that’s due five or 10 years down the road. Others offer loans with no payment due until after the first year.

Instead of financing the entire start-up cost, franchisors may offer financing for portions of the entire cost. They may have financing plans for equipment, the franchise fee, operational costs or any combination thereof.

In addition to financing a portion of the start-up cost, the franchisor usually has made arrangements with leasing companies to lease the franchisee the equipment necessary to run the franchise. This can be a significant part of the financing, since equipment often makes up between 25 and 75 percent of a franchise’s total start-up costs.

If the franchise you’re considering doesn’t offer equipment leasing, look into nonfranchise, nonbank companies that specialize in equipment leasing for franchises. These types of financing companies will often provide asset-based lending to finance franchisees’ furniture, equipment, signs and fixtures, and will allow franchisees to purchase the equipment at the end of the lease. Keep in mind that you may lose some tax advantages under the current law if you lease that equipment.

Remember that a business is franchised for two reasons: to expand the business and to raise capital. So if you have a reasonably good credit record and pass all the financial requirements, most franchisors will bend over backwards to get you on the team. The help that franchisors provide to help you get financing usually includes assistance with business plans and introductions to lending sources. In many cases, franchisors serve as guarantors of loans you take out.

Other Sources of Financing

After you’ve determined the extent of financing available from the franchisor, make a working list of all other available sources of capital. Most sharp operators use the following sequence of contacts: friends and relatives, home mortgages, veterans’ loans, bank loans, SBA loans and finance companies.

Often, banks that aren’t willing to work with you based on your financial profile become more amenable if you suggest working with an SBA loan guarantee; these loans are guaranteed up to 90 percent by the SBA. Small businesses simply submit a loan application to the lender for initial review, and if the lender finds the application acceptable, it forwards the application and its credit analysis to the nearest SBA office. After SBA approval, the lender closes the loan and disburses the funds; the borrower makes loan payments to the lender.

Some franchisors report being approached by financial brokers–historically more interested in big deals–to put together large pools of money using SBA and private funds. These funds would be available to franchisees through the franchisors like a trust fund. Groups of smaller banks with funds to invest would contribute to the fund from all over the country.

Other options would be to take out a home-equity line of credit or a second mortgage on your home. Be careful when utilizing this type of financing, however. The home-equity line of credit and a second mortgage are secured by your home. If you can’t repay the amount you finance using this source, you risk losing your home.

You can also use assets such as stocks, bonds, and mutual funds to secure a loan as long as they’re not part of a qualified plan like an IRA profit-sharing plan. Also, if you are over age 59 and have a lot of money tied up in an IRA, you could use it for part of your financing requirements. Although you’ll have to pay taxes on the amount used, not to mention suffer the loss of income from interest, it can be a good financing tool.

If you are under age 59 and your IRA is one of your largest assets, you still may be able to take advantage of this avenue without accruing the 10-percent penalty associated with early withdrawal. By taking Substantial Equal Periodic Payments spread over a minimum of five years, based on your life expectancy, and a set of annuity tables published by the IRS, you can eliminate the 10-percent penalty, although the money is still taxable.

Tips to Consider

There are infinite sources of financing available to help you launch the franchise of your dreams. However, operating a franchise with no reserves and blinding yourself to unexpected business problems can lead to disaster. A good rule to remember: Never invest more than 75 percent of your cash reserves. If you have $10,000, invest $7,500. If you have $25,000, invest $18,750.

More important, remember that the price of a franchise doesn’t always reflect the actual cost of the business itself. Additional costs can include down payments on the land, building, equipment, fixtures and signs, and can cover inventory, leasehold improvements, training, opening promotional costs, administrative costs and even sales commissions.

Be sure you understand the requirements of your cash investment. You will need a “pillow” of working capital to properly guide the business through its ups and downs. If you do your homework thoroughly, and remember that financing a business is the most important sale you’ll ever make, then you’ll be head and shoulders above the competition.

15 Fast Franchise Financing Tips

1. Talk to your franchisor before searching for outside financing; get approved or pre-qualified.

2. The most common source of start-up capital is friends and family. Use them.

3. Seek out lenders that understand not just small business but franchising as well.

4. Be totally honest and upfront with lenders. Hide nothing. Be prepared to explain everything.

5. Neatness counts. Fill out your credit and loan applications clearly. Typed is better.

6. Don’t weigh down your loan application with attached documents.

7. Don’t exhaust your liquidity by paying off outstanding debts before filing a loan application. Lenders want you to have capital available.

8. If you lack liquidity, find a partner with money.

9. Consider equipment leasing to conserve start-up capital and improve the appearance of your balance sheet.

10. Keep debts and expenses to a minimum. Many business owners take on too much debt, forgetting that cash flow must pay that debt.

11. Consider buying used equipment, furniture, vehicles, etc.

12. Let your fingers do the walking on the Internet before wasting time, energy, gas and phone calls. You’ll find useful information. Some sites even allow you to file loan applications online.

13. Don’t overlook angel investors and venture capitalists.

14. Avoid dipping into your retirement money or your kids’ college funds. Any startup-even a franchise-is a risk.

15. Don’t give up.


Why I Sold My Subway Shops to Open a Smoothie Franchise

Why I Sold My Subway Shops to Open a Smoothie Franchise

Why I Sold My Subway Shops to Open a Smoothie Franchise

Linda Morgan is a franchise industry veteran. She began working in the restaurant business at age 16 as an hourly employee at Burger King. In 1990, she and her son-in-law opened their first Subway location. Today, however, they’ve sold their Subway shops and turned to Tropical Smoothie Café. Here’s why they decided to make the switch from sandwiches to smoothies, and what they’ve learned during their decades in the franchising business.

Name: Linda Morgan

Franchise owned: Tropical Smoothie Café, with 14 locations across Alabama, Florida and Georgia

How long have you owned a franchise?

I’ve been in franchising since 1990, when my son-in-law, Russ Rissman, and I opened our first Subway location. After selling all our Subway stores, we became Tropical Smoothie Café franchisees in 2011.

Why franchising? 

While some mom-and-pop shops are successful, many of them fail. It’s difficult to go out on your own. You have to come up with a product and market it — something not everyone is fit to do. We knew we wanted to have multiple locations and it would have been much more challenging to do that if we had not have had the backing of a proven business model like Tropical Smoothie Café.

What were you doing before you became a franchise owner?

I’ve been in the restaurant industry my whole life. I started as an hourly employee at Burger King when I was 16 and fell in love with it. Later, I went to work for a Burger King franchisee and grew from assistant manager, to restaurant manager, division manager and head of training. I knew the next step was to become a franchisee myself, so I joined Subway.

Why did you choose this particular franchise?

One of our Subway locations was actually next door to a Tropical Smoothie Café, so we would occasionally stop by to get smoothies. We eventually learned the café had more than just smoothies — there’s great food too! At that point, the brand only had 300 cafes, so we saw an opportunity to join a young company we could help grow. We knew consumers were increasingly leaning toward healthier options, so we felt like we could do bigger and better things with Tropical Smoothie Café. We talked with the existing franchise owner, made him an offer and purchased the café.

How much would you estimate you spent before you were officially open for business?

With 14 cafes in our portfolio, costs have varied by location. However, on average, our build-out costs have included:

  • Franchise fee: $15,000
  • First and last month’s rent: $7,000
  • Equipment/smallwares cost: $85,000
  • MICROS system: $14,000
  • General contractor: $95,000
  • Startup cash / marketing: $2,000 – $3,000
  • Signage: $4,000

Where did you get most of your advice/do most of your research?

We did most of our research through Tropical Smoothie Café’s corporate office and our own due diligence. We reviewed the location’s financials and worked our own numbers based on the kind of labor and food cost we could run. That research, combined with corporate’s input, really pushed us toward choosing Tropical Smoothie Café.

What were the most unexpected challenges of opening your franchise? 

When I first started franchising, I was not totally prepared that the buck really does stop with me. When you’re a small business owner, all the decisions — from hiring people who really want to work hard to dealing with customer complaints and where you buy your insurance — is up to you. It took me a little bit by surprise. Fortunately for me, I thrive on challenges!

What advice do you have for individuals who want to own their own franchise? 

Do your homework and realize that you’re not going to make money in the beginning. It’s difficult for people to understand there won’t be instant gratification. You have to work really hard and put in a lot of time without reaping the benefits. Be prepared financially to keep yourself afloat to get through those first couple years. It’s a total commitment to your business, so make sure this is really want you want to do. It gets easier and becomes incredibly rewarding, but at first, it can be challenging.

What’s next for you and your business?

To grow with Tropical Smoothie Café! The brand opened its milestone 400th restaurant in 2014 and expects to exceed 500 locations in 2015 by opening cafes around the U.S., especially in cities like Atlanta, Houston, Dallas, Charlotte and Columbus, Ohio. And fast casual continues to gain popularity; Americans spent more than $21 billion at fast casual restaurants last year. It’s a great business to be in and we definitely want to be a part of that growth with Tropical Smoothie Café.

We’re currently building a café in Gulf Breeze, Fla., which should open by May. We’re also looking to grow in Phenix City, Ala., and Columbus, Ga. Ultimately, we’re aiming to have 30-35 cafes open. We won’t stop. We will grow every year.


How to Start a Cleaning Business

How to Start a Cleaning Business

If it can get dirty, chances are someone will be willing to pay you to clean it.

And that’s why few industries can claim the variety and depth of opportunities that professional cleaning can.

The cleaning industry has two primary market groups: consumer and commercial. The consumer arena consists primarily of residential maid services, along with carpet cleaners, window cleaners and a variety of other cleaning services required on a less-frequent basis. The commercial arena is dominated by janitorial services, which typically provide a wider range of services than maid services, along with other cleaning companies, such as carpet and window cleaners that target businesses rather than individual consumers. While it’s recommended that you decide on a niche and concentrate on building a business that will serve your chosen market, it’s entirely realistic to expect to be able to serve multiple markets successfully.

Before you leap into the cleaning business, it’s important to look at it with 20/20 vision. Though technology has certainly had an impact on cleaning services, this is not a high-tech business. Nor is there any glitz to it. And there will be times when you’ll have as much trouble as Rodney Dangerfield getting respect.

But the upside is that you can build an extremely profitable business that will generate revenue very quickly. Most cleaning service businesses can be operated on either a part-time or full-time basis, either from home or from a commercial location. That flexibility gives this industry a strong appeal to a wide range of people with a variety of goals.

Another positive aspect of the industry is that within each category of cleaning businesses are market niches and operating styles that vary tremendously. Salt Lake City janitorial service owner Michael R. says, “We offer a wide range of services to a very limited clientele. We have refined our customer base to a group that we feel we can best serve in a way that will allow us to maintain those customers permanently.”

This means you can build a company that suits your individual style and talents. If you like doing the work yourself, you can stay small and do so. If your skills are more administrative in nature, you can build and manage teams to do the work. For people who like working outside, the opportunities in service areas such as window cleaning and pressure washing are abundant. Residential maid services offer fairly predictable hours; disaster restoration and cleanup can mean calls at all hours of the day or night.

Few industries offer this tremendous range of choices and opportunities, and the need for general and niche cleaning is expected to increase in the future.

Do You Have What It Takes?

The necessary qualifications depend, of course, on the type of cleaning service you decide to start. But for any type of service business, you need a determination to make the business work, a willingness to please the customer and the dedication to provide a thorough cleaning job.

Another critical requirement for the owner and the employees of any type of cleaning service is honesty. “Clients must have total trust in the people who come to clean their homes,” says Fenna O, who owns a maid service in Orlando, Florida. This is important whether they’re cleaning bathrooms every week or carpets twice a year–or dusting and vacuuming an office at night.

A maid service is probably the simplest business in terms of necessary cleaning skills. Janitorial services, carpet cleaning businesses and other niche cleaning operations often require the use of special equipment and/or cleaning solutions for which you must be trained.

Beyond actually being able to do the work, a cleaning service operator needs some basic business skills. You need to understand the administrative requirements of running a company, you should be able to manage your time efficiently, and you must be able to build relationships with your employees and your customers.

Franchise or Independent Operation?

That franchises will work closely with you as you start your business and take it to the point where it is running smoothly and profitability is an advantage, especially in the beginning. But you may find that once you become established and are financially secure, a franchise agreement is a decided disadvantage.

For people who want to own their own business but would rather choose an opportunity that has proven successful for many others rather than gambling on developing their own system, a franchise is the way to go. Also, most franchises provide a degree of marketing support–particularly in the area of national advertising and name recognition–that’s extremely difficult for individuals to match.

In the long run, you’ll likely invest far less money operating as an independent service than as part of a franchise. Also, as an independent, you’re not tied to any pre-established formulas for concept, name, services offered, etc. That’s both an advantage and a drawback. The advantage is that you can do things your way. The drawback is that you have no guidelines to follow. Everything you do, from defining your market to cleaning a bathtub, is a result of trial and error. As an independent owner, you must research every aspect of the business, both before and during your business’s lifetime, so you’ll start right and adapt to market changes.

Target Market

Most of the cleaning service operators we spoke with used personal savings to start their businesses, then reinvested their early profits to fund growth.

If you need to purchase equipment, you should be able to find financing, especially if you can show that you’ve put some of your own cash into the business. Beyond traditional financing, you have a range of options when it comes to raising money. Some suggestions:

Your own resources. Do a thorough inventory of your assets. People generally have more assets than they immediately realize. This could include savings accounts, equity in real estate, retirement accounts, vehicles, recreation equipment, collections and other investments. You may opt to sell assets for cash or use them as collateral for a loan. Take a look, too, at your personal line of credit. Many a successful business has been started with credit cards.

Friends and family. The next logical step after gathering your own resources is to approach friends and relatives who believe in you and want to help you succeed. Be cautious with these arrangements; no matter how close you are, present yourself professionally, put everything in writing, and be sure the individuals you approach can afford to take the risk of investing in your business. Never ask a friend or family member to invest or loan you money they can’t afford to lose.

Partners. Using the “strength in numbers” principle, look around for someone who may want to team up with you in your venture. You may choose someone who has financial resources and wants to work side-by-side with you in the business. Or you may find someone who has money to invest but no interest in doing the actual work. Be sure to create a written partnership agreement that clearly defines your respective responsibilities and obligations.

Government programs. Take advantage of the abundance of local, state and federal programs designed to support small businesses. Make your first stop the U.S. Small Business Administration; then investigate various other programs. Women, minorities and veterans should check out niche financing possibilities designed to help these groups get into business. The business section of your local library is a good place to begin your research.


A Homebased Location

One of the hottest business trends today is to be homebased, and cleaning services are excellent candidates for this type of setup. After all, your customers will likely never come to your facility since all your work is done on their premises. But that’s not the only issue influencing your decision to operate from a homebased office or a commercial location.

Many municipalities have ordinances that limit the nature and volume of commercial activities that can occur in residential areas. Some outright prohibit the establishment of homebased businesses. Others may allow such enterprises but place restrictions regarding issues such as signage, traffic, employees, commercially marked vehicles and noise. Before you apply for your business license, find out what ordinances govern homebased businesses; you may need to adjust your plan to be in compliance.

Opening a Commercial Location

Many industry veterans believe that in order to achieve authentic business growth, you must get out of the home and into a commercial facility. Certainly, doing so will help you create a successful and professional image, but before you begin shopping for an office, think carefully about what you’ll need.

Your office area should be large enough to have a small reception area, work space for yourself and your administrative staff, and a storage area for equipment and supplies. You may also want to have space for a laundry and possibly even a small work area where you can handle minor equipment repairs. Depending on the size of your staff, consider allowing for a small break area.

Regardless of the type of cleaning business you have, remember that chances are slim that your customers will ever come to your office. So look for a facility that meets your operational needs and is in a reasonably safe location, but don’t pay for a prestigious address–it’s just not worth it.


Because your work is done at your customers’ sites, vehicles are as important to your business as the location of your office. In fact, your vehicles are essentially your company on wheels. They need to be carefully chosen and well-maintained to adequately serve and represent you.

For a maid service, an economy car or station wagon should suffice. You need enough room to store equipment and supplies, and to transport your cleaning teams, but you typically won’t be hauling around pieces of equipment large enough to require a van or small truck.

You can either provide vehicles or have employees use their own. If you provide the vehicles, paint your company’s name, logo and telephone number on them. This advertises your business all over town. If your employees use their own cars–which is particularly common with maid services–ask for evidence that they have sufficient insurance to cover them in the event of an accident. Also, confirm with your insurance agent that your own liability policy protects you under those circumstances.

The type of vehicles you’ll need for a janitorial service depends on the size and type of equipment you use as well as the size and number of your crews. An economy car or station wagon could work if you’re doing relatively light cleaning in smaller offices, but for most janitorial businesses, you’re more likely to need a truck or van.

For carpet cleaning services, you’ll need a truck or van, either new or used, for each service person and his or her equipment. A good used truck will cost about $10,000, while a new one will run from $18,000 up.

Do You Need Employees?

Consider these startup staffing suggestions:

For a Maid Service Business: Your initial staffing needs will depend on how much capital you have, how large a business you want to have, and the volume of customers you can reasonably expect to service. Many independent maid services start with just the owner. Others will start with the owner and an appropriate number of maids. If you handle the administrative chores, chances are you won’t need to hire office help right away.

For a Janitorial Business: You may be able to start with no employees–or just one or two part-timers. If you have the capital available and the business lined up, you may need to hire more. You may also want to consider an administrative person to handle the records and answer the phone during the day; after all, if you’re working all night, you need to schedule some time to sleep. As your business grows, consider a marketing/salesperson, a customer service manager, and crew supervisors as well as additional cleaning personnel.

For a Carpet Cleaning Business: Depending on the strength of your pre-opening campaign and your startup budget, hire at least one service person and possibly two as you’re getting started, along with an employee experienced in clerical work who can book appointments and handle administrative chores. Though one person can likely handle most of the residential jobs you’ll get, you may want to consider staffing each truck with two people: a senior technician and a helper. The helper can assist with the prep work for each job (unloading equipment, moving light furniture, etc.), mix chemicals, empty buckets, clean up afterward, etc. This will make each job go faster, which is more efficient and cost-effective and also generates a greater degree of customer satisfaction.


Pricing can be tedious and time-consuming, especially if you don’t have a knack for crunching numbers. Especially in the beginning, don’t rush through this process. If your quote is too low, you’ll either rob yourself of some profit or be forced to lower the quality of your work to meet the price. If you estimate too high, you may lose the contract altogether, especially if you’re in a competitive bidding situation. Remember, in many cleaning situations, you may be competing against the customer himself; if your quote is high, he or she may think, “For that much money, I can just do this myself.”

During the initial days of your operation, you should go back and look at the actual costs of every job when it’s completed to see how close your estimate was to reality. Learning how to accurately estimate labor and properly calculate overhead will let you set a competitive pricing schedule and still make the profit you require.

To arrive at a strong pricing structure for your particular operation, consider these three factors:

  • Labor and materials. Until you establish records to use as a guide, you’ll have to estimate the costs of labor and materials. Labor costs include wages and benefits you pay your employees. If you are even partly involved in executing a job, the cost of your labor, proportionate to your input, must be included in the total labor charge. Labor cost is usually expressed as an hourly rate.
  • Overhead. This consists of all the nonlabor, indirect expenses required to operate your business. Your overhead rate is usually calculated as a percentage of your labor and materials. If you have past operating expenses to guide you, figuring an overhead rate is not difficult. Total your expenses for one year, excluding labor and materials. Divide this number by your total cost of labor and materials to determine your overhead rate. When you’re starting out, you won’t have past expenses to guide you, so use figures that are accepted industry averages. You can raise or lower the numbers later to suit the realities of your operation.
  • Profit. This is, of course, the difference between what it costs to you provide a service and what you actually charge the customer. Figure your net profit into your estimate by applying a percentage of profit factor to the combined costs of labor and materials and overhead. The profit factor will be larger than the actual percentage of gross revenue you’ll end up with for your net profit. For example, if you plan to net 38 percent before taxes out of your gross revenue, you will need to apply a profit factor of about 61.3 percent to your labor and materials plus overhead to achieve that target.


If you’re extending credit to your customers–and it’s likely you will if you have corporate accounts or if you are in the janitorial business–you need to establish and follow sound billing procedures.

Coordinate your billing system with your customers’ payable procedures. Candidly ask what you can do to ensure prompt payment; that may include confirming the correct billing address and finding out what documentation may be required to help the customer determine the validity of the invoice. Keep in mind that many large companies pay certain types of invoices on certain days of the month; find out if your customers do that, and schedule your invoices to arrive in time for the next payment cycle.

Your invoice should clearly indicate the terms under which you’ve extended credit. Terms include the date the invoice is due, any discount for early payment and additional charges for late payment. It’s also a good idea to specifically state the date the invoice becomes past due to avoid any possible misunderstanding. If you’re going to charge a penalty for late payment, be sure your invoice states that it’s a late payment or rebilling fee, not a finance charge.

Finally, use your invoices as a marketing tool. Mention any upcoming specials, new services or other information that may encourage your customers to use more of your services. Add a flier or brochure to the envelope–even though the invoice is going to an existing customer, you never know where your brochures will end up.


Though the total market for cleaning services is tremendous, you must decide on the particular niche you will target. If you want to do residential cleaning, do you want to clean private homes, condos and apartments, or empty rental units? If you’re starting a janitorial business, will you focus on offices, retail operations or manufacturing facilities? And will you target small, medium or large customers? As a carpet cleaner, will you clean residential or commercial facilities–or both? And what services other than shampooing carpets will you provide?

Once you’ve decided on a market niche, you must then look at the geographic area you want to serve. If you’re starting a maid service, you want to be able to schedule cleanings in a way that keeps your travel time to a minimum. The same applies to carpet cleaners. Janitorial crews that must move from building to building have a similar concern.

After you’ve identified what you want to do and where you’d like to do it, research the demographics of the area to be sure it contains a sufficient number of potential customers. If it does, you’re ready to move ahead. If it doesn’t, you’ll need to reconsider how you’ve defined your niche or the geographic area.

Part of your market analysis includes your costs to serve that market. A densely populated market allows you to serve a greater number of customers because your travel time is minimal, but it also means you’ll be consuming more supplies. This needs to be planned for as well as factored into your rates.

You can build a very successful cleaning business on referrals, but you need those first customers to get started. Where are they? Indianapolis-based Bane-Clene Corp. suggests you start by contacting the following groups:

  • friends and relatives
  • your neighbors
  • former co-workers and employers
  • social groups and clubs, including card clubs, bowling teams, athletic leagues, lodges, fraternities, alumni groups, and neighborhood associations
  • church or religious acquaintances

The Elements of Image

One of your most important marketing tools is the image you project. Jim Cavanaugh, founder and president of Jani-King International, a commercial cleaning franchise in Dallas, says image is made up of several components, including:

  • The way you and your crew look. Are your workers clean and neat, wearing attractive uniforms or at least nice jeans or slacks?
  • Your printed materials. Are your invoices and statements typed neatly or computerized? Do the documents you produce display professionalism, or do you damage your image by using handwritten bills and scrap paper for notes?
  • Equipment. Is your equipment clean and in good repair, or dirty, with loose wheels, taped cords and in general disrepair?
  • Integrity. Do you operate and behave in such a way that building managers and owners are comfortable trusting you and your employees with unsupervised access to their facility?
  • Insurance.Having adequate business insurance, including liability, workers’ comp and bonding your employees, builds your credibility and image.
  • Your vehicles. Are your company vehicles clean, running properly and neatly marked with your company name and logo? A dirty, dented truck that belches smoke won’t impress your clients.




Buying a Restaurant Franchise

Buying a Restaurant Franchise

Do you have what it takes to be a successful restaurateur? Our franchise expert offers some words of wisdom.

There are many different types of business format franchises, but when most people think of a franchise business, their first thought is of food. The success and growth of the many big brand-name fast-food franchises makes this a logical first stop in the thinking process.

When evaluating restaurant franchises, you must focus on the characteristics of the business from a franchisee’s perspective to determine whether this industry is the right one for you. There are some wonderful advantages to having a food business, but there are also some challenges you need to be aware of before proceeding in this industry.

In assessing a food business, the main advantages are typically considered to be:

  • Built-in Demand. Consumers have been trained to look for franchise food outlets, which can represent a big advantage for a startup. You need to make sure the product offering of the food franchise has “staying power” in the marketplace rather than being a fad or fringe product.
  • Ease in Financing. Traditional lending sources are very familiar with the real estate and equipment needs of a prepared food operation, which may ease the challenge of obtaining startup financing. These sources also like the relatively high revenue production of a typical food franchise.
  • Track Record of Success. Many food franchises have multiple units and have been operating for a while, making it fairly simple to determine and verify their track record of success. That can help you make an informed decision about the business prior to getting involved.
  • Prestige. Whether valid or not, many people associate a high degree of glamour with a person who owns a food franchise business. The fairly high degree of status associated with this occupation is important to many prospective franchisees.

In assessing a food business, the main disadvantages typically include:

  • High Initial Investment. Most food franchises require a significant investment to get started. Food preparation stations, sinks, stoves and ovens, grease disposal systems, venting requirements, customer seating and bathroom areas–the list goes on.
  • Zoning and Code Compliance. The government goes to great lengths to ensure that any food business meets numerous codes and guidelines so the food product is safe for the public to consume. Complying with these regulations, both initially and on an ongoing basis, is time consuming and expensive. Virtually any food franchisor will provide extensive assistance to a new franchisee in terms of dealing with zoning, permits, code compliance and all other site-related issues, because the new franchisee probably doesn’t have a clue how to do this whereas the franchisor has lots of experience on these matters. If a food franchisor doesn’t offer extensive support on these matters (you can determine this during your conversations with existing franchisees), pick a different one.
  • Labor Challenges. Most food businesses require the services of a significant number of low paid employees to conduct their business. Turnover of these employee positions is normally very high, and recruiting and retaining a sufficient number of acceptable quality employees is typically listed as the number-one challenge in any food franchise.
  • Relatively Low Margins. In food operations, the franchisee has both the cost of goods sold and labor costs to contend with in an environment that is very price sensitive, especially in fast-food outlets. The net margins of most food businesses are not nearly as high as other (particularly service-related) franchises, and you’re also dealing with spoilage, theft and other issues that you don’t find in many other types of franchise businesses.
  • Quality of Life. As mentioned above, many people associate a high level of status with owning a food business, at least until they understand the facts of a typical food franchisee’s life. The hours can be very long, as you’re often the first to arrive and the last to go home. The labor challenges can be very frustrating and are the main reason owners cite for wanting to leave this industry. Then there’s also the issue of what a person smells like after spending long hours each day in a food franchise.

The secret to success in evaluating any food franchise (or any franchise for that matter) is to clearly identify the skills necessary to succeed, then make sure you either have them or go do something else. The food business can be very rewarding to a person who has the special blend of skills and aptitude to make the business work, and these operators are among the most respected in all of franchising because of their success.

The obvious question, assuming you don’t have previous experience running a food business, is “how do you know whether you have these skills and aptitudes?” The best answer, and one that is actually required by a few of the most successful food franchises, is to go to work in an existing unit and shadow the present owner until you’ve gained enough experience to know for sure. This isn’t going to be a process involving an hour or two–more likely it’ll take at least a few weeks to know for sure. The time commitment involved may seem high, but it is infinitely better for you to find out early (and without risking your life savings) if this business is not for you.

A final consideration related to food franchises is this: Some food franchises run very simplified operations and can provide a business model that avoids a number of the disadvantages listed above. These are typically businesses that don’t involve cooking a product, at least not on site. They may use a commissary system to deliver ready-to-serve products, or products that only have to be assembled in order to serve, to the franchise outlet. These types of businesses, like a Subway outlet, can avoid many issues but almost always still have to deal with the employee issues discussed above.

Give some serious thought to the franchisee role in terms of the tasks required in a typical day or week, the hours worked, the investment and the possible returns. Make sure you know what it takes to succeed and that you possess those qualities. Then you’ll know whether being a restaurateur is right for you.


How Do I Start a Franchise?

How Do I Start a Franchise?

Keep in mind these requirements when you consider making the move from business owner to franchisor.

Q: I’ve got a great business that I think would be perfect for franchising. How do I get started as a franchise company? What kinds of advisors will I need and where do I find them? Is there a good source of information for me to start with?

A: Congratulations on building a successful business. It is exciting that you are considering using franchising as a method of expanding your brand and operations. You have some great questions so let’s discuss each in turn.

First of all, one of the best starting points for researching this idea is the International Franchise Association (the IFA). The IFA is the industry trade association for franchising and has a host of resources that you can access to get started in this process. You can find the IFA and start your search by going to their Web site .

Starting a franchise company is not an easy or inexpensive process. There are a number of requirements you will have to meet and a few other things that, though not legally required, are also essential. These requirements include:

  • Legal. You will be required to prepare a standard disclosure document for your franchise operation. This document, called the Uniform Franchise Offering Circular (UFOC) is required of all companies, by the Federal Trade Commission, if they want to offer franchises for sale anywhere in the United States. In addition, there are a number of individual states that have registration requirements you must meet if you are going to offer franchises in those states. You will need an effective and experienced franchise attorney to help you meet these legal requirements correctly. As with any advisor, make sure to check the experience and references of attorneys when making this selection.
  • Accounting. You are going to need to prepare audited financial statements for the franchise company. This is actually one of the disclosure requirements under the legal section above so you won’t be able to complete legal until you have your statements audited. You’ll have to decide if you want to set up another company to franchise your concept or if you want to use the existing business entity you are operating as your franchise company. You’ll need an experienced accountant to produce these audited statements and to advise you on the structure of your business enterprise. Again, make sure you are getting someone experienced in operating in the franchise arena and check references prior to deciding on this person.
  • Systems. The heart and soul of any successful franchise company is systems. You will need to develop and completely document the systems that a franchisee will use to run their business successfully. You will need to develop a training program that will teach a new franchisee whatever they need to know to become a successful operator. You will need to formalize the marketing plans that a new franchisee will use to drive customers into their new unit. You will also need to design a sales system that you can use to recruit new franchisees into your franchise company. There’s a mountain of work getting all your systems set up and ready to go. You can hire outside consultants to assist with all this work but if you do, make sure you check references very carefully since there is a wide variance in terms of what these folks do and what they charge for it.
  • Mindset. One of the most important things you need to do in order to be a successful franchisor is to have the right focus and attitude. In your existing business, you’re the boss, you have employees and they probably do what you tell them to do without much resistance. Franchisees are quite different from employees and you need to make sure you don’t treat them as if they were employees. Successful franchisors use a lot of persuasion to get the franchisees to do what they want rather than issuing orders. It’s not as fast or efficient but you’ll find that you meet a lot of resistance from franchisees if you don’t do it this way. I don’t know about specific advisors related to this topic but there are numerous industry meetings and opportunities for you to interact with other franchisors and you should take advantage of all these as a learning experience.

The final thought I’ll leave you with is a word of caution. Most honest advisors in the franchise business will tell you that you’ll need at least $500,000 to $1,000,000 in initial capital to even think about starting a franchise company. You will probably work harder than you ever have for at least 2-3 years before you even start to make any money on your franchise operations, and it could easily be 3-5 years.

The rewards and satisfaction of building a successful franchise company are incredible but so is the price that you’ll pay to reach this goal. Make sure that you want to pay the price before you start this process and then go forward with realistic expectations and you should do fine.


3 Sources of Franchise Financing

3 Sources of Franchise Financing

Know how to make sense of the current economy and its impact on franchise funding.

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Everyone knows the current lending environment is a challenge–especially if you’re trying to finance a startup. Yes, there’s still financing available for qualified people, but selecting the right funding strategy is more important than ever. It’s time to get creative when thinking about financing options.

Despite what you hear on the news, money is available. There are institutions and individuals who haven’t been affected by the housing market and still have money to lend. It’s important to note, however, that we’re seeing some big changes from traditional lending procedures in the franchise industry.

The first change is that it’s more important than ever to start sourcing financing options before even choosing the franchise you want to buy. While historically we’ve seen much of the franchise finance market driven by home-equity lines of credit, this type of financing is more difficult to obtain in the current financial climate. Therefore, it’s never too early to look into financing alternatives.

Another change is that your credit score is far more important now than it was even a few months ago. In today’s climate, getting financing will be difficult with any credit score below about 700.

Also, once you’ve decided on your franchise and are approved for a loan, act on it quickly. Lenders aren’t going to leave credit commitments outstanding for 30 days or more the way they used to; they want you to act in five to 10 days. If you don’t take it, they’ll cancel their offer and lend the money to someone else.

In the past, people relied on time-tested approaches for franchise loans; but in today’s economy, you may need to get more creative. Here are three alternative funding sources to consider:

Franchise Funding Specialists
How do you know which finance options might be best (or even available) for you? Companies such as FranFund or Guidant, which live in this market every day, can explain potential strategies you can use in your financing efforts.

These companies typically have established relationships with various lenders that specialize in one or more types of franchise financing. They may also offer equipment-leasing options, signature credit lines, 401(k) rollover products, SBA lending, conventional lending, etc. Finally, they can tell you how much credit is realistically going to be available to you.

After gathering your financial information, the franchise funding specialists will formulate a lending strategy with you. Once you make the final decision to proceed, they will package your information and follow the process from beginning to end. Their knowledge and relationships in the industry are critical in expediting the transaction, and these companies typically don’t charge a fee for their services until or unless you actually receive your financing. So the upfront risk to you is limited to a small amount of your time.

Cash is King
We’ve heard it before. Well, this is never truer than in uncertain economic times. Many executives have been or are going to be displaced in this market shakeup, and they often receive a significant amount of cash to help them transition out of their old jobs.

This cash can come in the form of severance pay (lump sum or otherwise). It can also come as benefit continuations, retirement account settlements or rollovers. Ask yourself how you’re going to “invest” this cash in an effort to re-create your lost income or, better yet, build some additional wealth for your family.

Consider investing it in yourself by building a franchise that can support you. Many people, after considering this idea, come to the conclusion that they can produce at least as high a return using this strategy as they would in the stock market. They will also have far more control during the process.

Thank You For Your Service
For our country’s veterans, the government has established a program called the Patriot Express Pilot Loan Initiative. This is an SBA-guaranteed loan program for military veterans, those currently in the military who are close to retirement (Check the SBA website for eligibility requirements) or their spouses. The SBA will guarantee up to 85 percent of the loan. That means the lender only is at risk for 15 percent, which makes such loans more attractive to the lender. Best of all, the credit score requirements for Patriot Express loans are significantly lower than what we otherwise see in the current market, so it’s easier to qualify for these loans.

Honorably discharged military personnel should also look into the VetFran program, which the International Franchise Association started as a way to help veterans. To date, more than 300 companies have joined the program, which offers substantial discounts on fees and expenses as a way to show appreciation for honorable service to our country.

Because there are many ways to finance a new franchise, be prepared to do some careful research on the subject to find the option that will work best for you. Though the financing market has gotten more difficult in this tight credit cycle, there are always loan dollars available for the right person and the right opportunity.

Remember to ask everyone you think might be helpful in your search (including the franchise company you are interested in) for any advice and options that might be available to you. Start early, and continue to refine your efforts as you get closer to deciding on a franchise. Good luck.