What unites veterans and franchise business, and what does Oschadbank have to do with it?
Interview
"The Air Force is all about honesty, excellence, and dedication, and these qualities have prepared me to be diligent and thorough in my work. I don't try to take the easy way out. The job will always be done right." Mark Stewart, a retired US Air Force officer and current Office Pride franchisee, said this.
These words are posted on the website of VetFran, an initiative designed to attract American veterans to participate in the franchise business. Such initiatives are not uncommon in the United States and, based on statistics, are very successful. Veterans in the United States make up about 7% of the population, while they account for 14% of the franchise business. Veteran franchisees are more likely to hire veterans as employees, and 65% of franchisors said that the number of veterans hired has increased in recent years.
Why is the participation of veterans in franchise projects a win-win situation for both parties of the cooperation? Because veterans have always been attracted to this business model, and franchisors have long recognized that veterans are among the most qualified, motivated, and successful potential franchisees.
When veterans return to civilian life, they have inherent leadership skills. Combat experience is about motivating people, improving processes, and accomplishing tasks. Like the military, successful franchisees work in a team. This means both the team of the franchise establishment and, in a broader sense, the team of the entire franchise project.
A well-developed franchise business operates according to proven schemes and defined procedures. Following instructions and strict adherence to procedures are components of military training, among other things, and this ensures the success of the franchise.
Franchises involve training. In service, military personnel undergo intensive training and learn very specific skills to perform very specific tasks. Franchises also provide comprehensive training and support. This means that a veteran can work in a new field of activity and be more likely to succeed by following a proven business model and completing a training program.
For veterans, participation in a franchise project is a good balance between independence and financial security. There is great potential for earnings, as well as valuable experience in doing business in an established, successful business environment.
In Ukraine, the reintegration of veterans into society is now a topical issue. An important aspect is economic reintegration. Having given a significant part of their lives to defend Ukraine, veterans often remain out of business life. People in the home front continue their professional development, while at the front, completely different competencies are being strengthened.
Perhaps that is why, according to surveys conducted by the Ukrainian Veterans Fund, 63% of those who are currently defending Ukraine would like to start their own business after the war. Only 15% of them are ready to be employees. Almost 2/3 of the huge number of current defenders of Ukraine are a huge economic army. At the same time, according to the Unified State Register of War Veterans (USRV), as of September 2023, there were more than 850,000 veterans and their families in Ukraine (and there will be many more).
The idea of a veteran franchise is not entirely new to Ukraine. Once upon a time, Oschad invited his client Leonid Ostaltsev, who created an umbrella brand for veteran businesses, to the bank’s internal events. At the end of 2021, the brand included Veterano Coffee mobile outlets and cafes, Veterano Brownie mono-confectionery, Veterano Bar, Veterano Pizza chain in six cities of Ukraine: Kyiv, Boryspil, Odesa, Ivano-Frankivsk, Kryvyi Rih, and Mariupol, as well as Veterano Pizza Delivery service.
According to media reports, only veterans could start a veterans' business; almost half of the employees of Veterano Group establishments were former defenders of Ukraine who had adapted to civilian life. Part of the profits of the establishments were used to help the families of fallen heroes. Visitors to the pizzerias could also leave "suspended" pizzas to pay for orders for wounded soldiers in hospitals. The full-scale war changed the priorities of the group's founder: he returned to the ranks of Ukraine's defenders and is now a patrol police officer. At the same time, the business is functioning, because, according to Leonid, fortunately, he has someone to leave it to.
Taking all this into account, we at Oschad decided to take advantage of foreign and domestic experience and developed a special loan product for veterans and their families, as well as for businesses that employ veterans, called "4.5.0". This is a military slang code for "all is well." With this loan, you can buy a successful franchise.
Why do we believe that 4.5.0 will be popular?
The first reason is that it provides an opportunity to start a business even for those defenders of Ukraine who have no entrepreneurial experience. To mitigate risks, we decided to provide loans only for the purchase of franchises that have proven their effectiveness. To be sure that the business is viable, we only finance accredited franchises. Instructions, marketing strategies, assistance with supplies – all these components are part of the franchise model, and they will help veterans quickly master the necessary business processes.
Secondly, to make lending terms more attractive, we have engaged a wide range of international and domestic partners. There are also six grace months when no interest is required and a preferential tariff package for cash management services.
Third, the reintegration of veterans in Ukraine is now a constant focus of the state and society. Many conferences, forums, and meetings are dedicated to this topic. Not only business, but also the state and the third sector are working on this issue. "4.5.0" is the first specialized bank loan product for veterans, but I would venture to predict that there will be many such products soon. We all feel that we owe a lot to our defenders, and therefore the number of such initiatives will only increase. We need to thank the veterans. The new product is one of Oschad's responses to this challenge.
Interview
Oschadbank Press Center