Operation Franchise

FAQ

What is a franchise?

In general terms, franchising is a way to own and operate a business that is associated with another business by using that other business’ systems and trademarks.

Would I make a good franchise owner?

Yes. Your skills as a self-starter and leader, being independent and having an outstanding work ethic, and your capacity to follow rules and to take charge of situations make you an excellent candidate for operate a franchise.

Do franchisors like veterans to become part of their franchise system?

Absolutely! In most cases, franchisors seek veterans to become franchisees. You are especially suited to run a franchise.

How many types of franchises are there?

There are two types: product and business formats.

What is a product format franchise?

They are centered on a licensed product being sold by the franchisee, like a beer distributorship or automobile dealer.

What is a business or package format franchise?

These are centered on a uniform way of delivering a product to consumers and are the most common type of franchise. Examples such as McDonald’s® or Ace Hardware_® fall within this format.

What if I don’t want to run a fast food restaurant or hotel?

There are thousands of options, some of which may be considered as usual choices.

How many franchise systems are there?

3,000 to 4,000.

Can the federal government assist me in starting a business?

Yes, you have a few options: the U.S. Department of Veterans Affairs; VetBiz.gov; the Center for Veterans Enterprise; the U.S. Small Business Administration; and the Office of Veterans Business Development. Check our Links & Resources page for more information.

As a veteran, is there a loan option for me – something like the VA Home Loan for buying a house?

Yes. The SBA’s Patriot Express Loan is available to all honorably discharged veterans.

Are there other federal loan options available?

The U.S. Small Business Administration (SBA) is a great resource.

I’m a reservist. What can I do if I receive orders for deployment?

The U.S. Small Business Administration offers the Military Reservist Economic Injury Disaster Loan. See our Links & Resources page for further information.

Are there specific steps I should follow before I begin planning for my franchise?

Generally, there are 10 steps to starting a business:

Step 1: Research and plan your business

Step 2: Get business assistance and training

Step 3: Choose a business location

Step 4: Finance your business

Step 5: Determine the legal structure of your business

Step 6: Register a business name (“Doing Business As”)

Step 7: Get a tax identification number

Step 8: Register for state and local taxes

Step 9: Obtain business licenses and permits

Step 10: Determine employer responsibilities

Do franchisors provide training or assistance to help start a franchise?

Yes. Many franchise businesses provide training on specific topics or business aspects to help you begin your business. Additionally, most franchisors provide a guidebook – much like SOPs.

Can I find resource material about franchising?

In addition to Operation Franchise, there are books available.

Is there an organization that offers help for starting my business?

Yes, the International Franchise Association is a membership organization of franchisors, franchisees, and suppliers. See our Links & Resources page.

How frequently is the Operation Franchise magazine published?

Quarterly.

Do you provide information about upcoming franchise events?

Our Events page contains a listing.

Do franchises affect jobs and the economy?

Absolutely. According to an IFA Educational Foundation report conducted by PricewaterhouseCoopers, franchise businesses provide jobs for approximately 20 million Americans and generate trillions of dollars to the U.S. economy.

Are there retail sales figures about franchises?

Yes, in fact SCORE_®, a nonprofit association offering free and confidential small business mentoring, reported that nearly 45 percent of all retail sales are franchise-driven. Furthermore, one out of every 12 businesses is a franchise, with a new outlet opening every 8 minutes.