The late Don Dwyer, who founded the Waco-based franchising empire known as The Dwyer Group, had an idea 25 years ago to give veterans returning from the Gulf War a leg up on owning a business by offering discounts on companies that fall under the Dwyer umbrella.
It attracted the attention of the International Franchise Association, based in Washington, D.C., which adopted what The Dwyer Group called “VetFran.” Today, more than 650 companies around the country participate in the program, and about 6,000 veterans have acquired a business with its help since 2003.
Franchisees helped by VetFran nationally have created 238,000 jobs, and The Dwyer Group has granted more than $2 million in discounts on company purchases in the past five years, said Mike Bidwell, CEO of the company whose headquarters sprawl across a site near Lake Brazos and University Parks Drive.
Bidwell, 57, who attended a Platoon Leaders Class offered by the U.S. Marine Corps while attending the University of Arizona, said he became part of the business world after graduation instead of pursuing a career in the military. But he will never forget the lessons he learned in that limited exposure.
He said The Dwyer Group sees VetFran as a reward for veterans’ service and a way to tap into their expertise.
“We’re very fond of what the military does and the people they turn out, and we’re proud to provide the opportunity to become franchisees,” Bidwell said. “Ex-military typically do well in a franchising environment because it involves following a template, procedures and a proven method. And they are not afraid of hard work.”
The Dwyer Group oversees 11 franchising concepts, most of them in the service industry, including Mr. Rooter, Mr. Electric and Glass Doctor. It typically charges a franchising fee ranging from $35,000 to $45,000 to secure a concept and a territory, and veterans will receive a discount averaging $7,600.
Veterans, like other franchisees, are responsible for providing working capital and buying their own start-up equipment, vehicles and office space. But The Dwyer Group has a list of preferred vendors who offer these items at reduced prices, and it also can finance the franchise fee.
“We believe that our franchise companies, being hands-on, are conducive to attracting vets,” Bidwell said. “Some food franchises, for example, are quite expensive and may require an investment of up to $1 million, which would make them out of reach to veterans even with our financing help.”
Bidwell said The Dwyer Group constantly talks up the benefits of VetFran to other member companies of the International Franchise Association that may not yet participate in the program, adding he would like to see it grow nationwide and in Texas, where 16 vets own Dwyer-backed companies.
The International Franchise Association has partnered with the White House Joining Forces initiative, the U.S. Department of Veterans Affairs, the Small Business Administration and the U.S. Chamber of Commerce to step up recruitment of veterans interested in becoming their own bosses.
Jerry A. Allen Jr., 56, a native of Virginia who served 26 years in the U.S. Army before retiring in Central Texas, owns a Grounds Guys franchise from The Dwyer Group. He found himself up a tree Tuesday in Temple, cutting away mistletoe before taking a break to talk about his plans for the future.
Allen, calculating figures “off the top of my head,” said he acquired his franchise two years ago for about $25,000, which represented a discount of about $10,000. He said he had his own lawn service in Killeen but parted with his customers while continuing to work for the Burlington Northern Santa Fe Railroad. Allen said he soon realized he needed both incomes and linked up with Grounds Guys at the suggestion of a friend. He said he just hired four people.
“I’m starting to make a good living with Grounds Guys, enough so that I may work myself out of a job at the railroad,” Allen said with a laugh.
More than a discount
He said the discount provided by The Dwyer Group “was significant enough to allow me to acquire a franchise.” But beyond the reduced price, Allen said, he has access to a franchise coordinator who provides a shoulder on which to lean and others in the business who may supply tips and moral support.
Mark McGaughy owns a Mr. Rooter franchise in Waco and in the Dallas-Fort Worth area and employs 31 people between the two. He is a former Marine who left the military in 1994 and went to work for the owner of a Mr. Rooter company in Dallas, later buying the franchise with financing from his former boss. Last year, he acquired the Mr. Rooter in Waco.
“I received two discounts, one for being an employee buying a franchise, and then I got a special deal for being a veteran,” McGaughy said. “I saved a significant amount, much more than a guy off the street. By paying less for a franchise, profitability is easier to accomplish.”
He said he pays $27,000 a month on his loan to acquire the DFW operation and secured an $85,000 loan to get started in Waco after paying cash to cover part of the expenses.
Robert Cresanti, president and CEO of the International Franchise Association and a graduate of the Baylor University law school, said he expects growth in VetFran as the United States continues its drawdown of troops stationed around the world. Cresanti is a self-described military brat whose family moved often as his father pursued a career in the Air Force.
He said vets “have been an incredible addition to the franchising industry, whether they served in the infantry or as an F-16 mechanic on a runway.”
Cresanti described The Dwyer Group as a “storied member of our organization” and said he had the idea to launch VetFran under the leadership of the late Don Dwyer.
Dwyer was a veteran of the U.S. Air Force who grew up in New York but launched his franchising empire in Waco with Rainbow International, then a carpet cleaning and dyeing company.
Cresanti predicted a 3.1 percent growth in the franchising sector during 2016, meaning it will create 278,000 jobs.
Steve Hernandez, a McLennan County Veterans Services staff member, said he applauds VetFran for giving veterans a shot at owning a business. Hernandez said he would like to see local educational institutions get involved in training vets who may want to own a franchise but who don’t have the required skills.
The International Franchise Association will honor VetFran at its monthly convention scheduled later this month in San Antonio.