Boeing’s Harpoon Missile System is an all-weather, over-the-horizon, anti-ship weapon that is extremely versatile. The U.S. started developing the Harpoon in 1965 to target surfaced submarines up to 24 miles away, hence its name “Harpoon,” a weapon to kill “whales,” a naval slang term used to describe submarines.
It was a slow moving project at first until the Six-Day War of 1967 between Israel and Egypt. During the war, Egypt sunk the Israel destroyer INS Eilat from 14 miles away with Soviet-made Styx anti-ship missiles launched from a tiny patrol boat. It was the first ship in history to be sunk by anti-ship missiles.
The surface-to-surface destruction shocked senior U.S. Navy officers; after all, it was the height of the Cold War, and the weapon indirectly alerted the U.S. of Soviet capabilities at sea. In 1970 Admiral Elmo Zumwalt—then Chief of Naval Operations—accelerated the Harpoon project, strategically adapting it for deployment from air and sea. Seven years later, the first Harpoon was successfully deployed.
Today, the U.S. and its allies—more than 30 countries around the world—are the primary users of the weapon. 2017 marks its 50th anniversary, and it’s only getting better with age. Over the decades, the missile has been updated to include navigation technology, such as GPS, Inertial navigation system (INS), and other electronics to make it more accurate and versatile against ships and a variety of land-based targets.
This Boeing video describes the incredible history behind the Harpoon Missile System and its evolution throughout the years.
Air Force Capt. Mark Harper was probably worried about the lack of network connections and other technology in 2007 when he was sent to Djibouti, Africa, to take over a staff section there. Unfortunately, his colonel hadn’t gotten the message about Djibouti’s limited network access and ordered Harper and his crew to start making weather podcasts for Djibouti.
A podcast. In 2007. For a group of people with limited internet access. The “Good Idea Fairy” had struck again.
Shocker, it had a limited listenership and the crew wasn’t happy while making it. But since the order came from a colonel, they would need at least a general to shoot it down.
Unfortunately for them, their attempts to sabotage the program in front of a visiting two-star didn’t exactly go according to plan. Check out the whole story, complete with a colonel falling asleep on a grateful captain, in the video embedded above.
Typically, losing a limb is a career ender for troops. After all, they’ve already given enough and surely they won’t be able to withstand the rigors of combat without all four limbs.
Except, yes, they can. These 6 warriors lost limbs in battle, laughed in the face of death, and came back to fight another day:
1. Gen. Frederick M. Franks, the architect of Desert Storm
Gen. Frederick M. Franks was the commander behind the “Left Hook” of the American invasion of Iraq in Desert Storm. Franks’ armored formations surged north into Iraq and toppled over a dozen Republican Guard divisions. And he led the whole operation with one leg.
He and Gen. Eric Shinseki, who survived a partial amputation of his foot in Vietnam, used to show their prosthetics to new amputees in Walter Reed. The tours were designed to remind the younger soldiers that they could still achieve great things after an amputation.
2. Alexei Maresyev, a Hero of the Soviet Union
Alexei Maresyev had just graduated flight training when the Nazis invaded the Soviet Union and he was called on to fly against the technologically advanced Luftwaffe. In Jun. 1942, the young pilot was shot down over German-occupied territory and had to crawl for 18 days back to Russian lines. The frostbite and the injuries from the wreck resulted in both his legs being amputated.
But Maresyev fought his way back to active duty, partially because he was already respected for four aerial kills before he was shot down. In 1943 he again took to the air against the Nazis and shot down another seven enemy aircraft before the war ended, earning him the title “Hero of the Soviet Union.”
3. Douglas Bader, legendary pilot in the Battle of Britain
Like Maresyev, Bader was a respected pilot who lost his legs in a crash. Bader’s injuries resulted from an air show crash in 1931. The Royal Air Force retired him but said he might be able to return if war broke out. He spent the next eight years perfecting flight with prosthetics.
4. Capt. Jean Danjou, the Legionnaire who fought “France’s Alamo”
Jean Danjou graduated the French military school at Saint-Cyr and joined the army as an officer. After fighting Algerian nationalists in the 1840s, he volunteered to serve in the French Foreign Legion. At the Battle of Sevastopol, Danjou lost his left hand.
In 1863, Danjou led a 66-man element which came under attack by approximately 2,000 Mexican soldiers. He led a fighting withdrawal to a nearby estate at Camerone and rallied his men for an 11-hour battle. The unit was nearly wiped out but inflicted hundreds of Mexican casualties. Danjou died in the fighting. His prosthetic hand is now paraded in France every year at commemorations of the battle. The battle is sometimes described as “France’s Alamo.”
He repeatedly attacked Union Maj. Gen. William Sherman’s troops in an attempt to stop the march to the sea and relieve the pressure on Atlanta in 1864. After fighting there, Hood led troops in the defense of Tennessee in the Battles of Franklin and Nashville. With the Union Army marching south, he attempted to rally troops in Texas in 1865 but was eventually captured.
During a meeting Wednesday with a number of defense reporters and experts, outgoing Secretary of the Navy Ray Mabus defended the Littoral Combat Ship against criticism.
The LCS has been noted for a series of engineering problems that has laid up a number of the early ships. The problems have called the program into question even though the USS Freedom (LCS 1) had a very successful 2010 deployment to Southern Command’s area of operations, while the USS Coronado (LCS 4) successfully defeated a simulated attack by a swarm of speedboats in a 2015 test of the surface warfare package.
Mabus particularly aimed his ire at the Pentagon’s Office of Test and Evaluation, or DOTE, which has been part of an ongoing verbal fight between Pentagon testers and the Navy.
“My reaction is that I’ve been there almost eight years,” Mabus, who was confirmed in 2009, groused to the gathered reporters. “And I’m pretty sure that [DOTE director] Michael Gilmore has never found a weapon system that’s effective, ever.”
“I know what this ship can do. I know what the fleet thinks of it,” Mabus added, citing how the office was also highly critical of the P-8 Poseidon maritime patrol aircraft, claiming it didn’t work or do what the Navy said it would do. The DOTE criticism came even though the plane had already entered the fleet and was drawing rave reviews from operators.
The Littoral Combat Ship covered 20 pages in the DOTE FY2016 Annual Report, which claimed the Navy “has not yet demonstrated effective capability for LCS equipped with the MCM [mine counter-measures], SUW [surface warfare], or ASW [anti-submarine warfare] mission packages.”
The report also cited the 2015 cancellation of the Remote Minehunting System, and even claimed that the USS Coronado had flunked the 2015 test.
“The final thing I’ll say is, it does what we want it to do, not what you think it ought to do which is one of the things [Gilmore] does,” Mabus concluded.
Weeks prior to the 2017 NFL draft, service members from Joint Base McGuire-Dix-Lakehurst in Mount Laurel, New Jersey, were given the chance of a lifetime to undergo a surprise mission as part of the “Salute to Service” program.
Hosted by USAA, these unexpected military analysts from the Army, Navy, and Air Force, received the opportunity to team up with NFL broadcasters Ron Jaworski and Sal Paolantonio (US Navy vet) for a chance of a lifetime and partake in a draft strategy session.
Former Army Ranger and West Point grad Matthew ‘Griff’ Griffin isn’t your average vet entrepreneur. He came up with the notion of building something of value when he was serving in Afghanistan during the early phases of the war, way before there was much of a logistics footprint in place. He saw that the Afghan people were in need of more than protection from the Taliban. They needed basic goods and services.
“I saw Afghanistan as a place to leverage the power of small business owners making a difference,” Griff said. “The region could benefit from more micro loans and fewer armored vehicles.”
When Griff left active duty he returned to Kabul doing some clinic work, but beyond that he wanted to find a way to assist with the country’s stability by creating a manufacturing base, starting with a single factory he stumbled across on the east side of the capital. The factory had the infrastructure; it was just a matter of what to manufacture.
As he was leaving the factory he found a flip flop on the floor — it was unique and a little funky, the kind of design Griff thought might resonate with fashion-minded millennials. He held it up and asked the factory manager if he could make them, and the Afghan local said sure. Combat Flip Flops was born.
Griff and his brother procured the materials from a far eastern supplier and got everything set up, but they’d no sooner returned to the U.S. than they were informed that the factory was shutting down — a casualty of the volatile socio-economic climate of Afghanistan. But the brothers were undeterred, plus they had a lot of money wrapped up in the materials sitting in the factory in Kabul.
Without any U.S. military assistance — the most effective way to operate, according to Griff — they went back in on a private spec ops mission of sorts, one designed to salvage what they could from their investment and work that had been accomplished already.
“We rented a ‘Bongo’ truck and packed the inventory of flip flops into bags designed to hold opium,” Griff said. “We were riding around the streets of Kabul trying to look inconspicuous, two white guys sitting on a pile of opium bags.”
They stored the 2,000-some pairs of flip flops in a warehouse on the outskirts of Kabul, and as they did a closer inspection of their wares they realized that the quality was such that they couldn’t be sold. They wound up giving all of them away to needy Afghans, which was better than nothing but not up to the standards of Griff’s vision.
They found another factory, and once again secured a supplier (and paid for it using Griff’s credit card), and this time failure came even faster and the factory closed down before any materials for the order of 4,000 pairs had been shipped. It was time for a more dramatic pivot in the business plan.
“We wound up taking the guerrilla manufacturing route and assembling the sandals in my garage in Washington state,” Griff said.
The company’s potential big break came in the form of a phone call from one of the producers at ABC’s “Shark Tank” TV show. Griff and a couple of his co-workers will appear on the episode scheduled to air on February 5. (Check your local listings.)
“We’re stoked to bring the Combat Flip Flops mission to the tank,” Griff’ said. “Every Shark has the ability to expand the mission, inspire new recruits to join the Unarmed Forces, and manufacture peace through trade. Over the past few years, we’ve survived deadly encounters to create an opportunity like this. Attack Dogs. Raging Bulls. If we need to jump in the water with Sharks, then it’s time to grab the mask and fins.”
“We’ve all seen and heard Shark Tank success stories,” Donald Lee, Combat Flip Flops’ CMO and co-founder, added. “We set our minds to getting on the show and in true Ranger fashion, we accomplished the objective. We hope this is the catalyst our company needs to provide large scale, peaceful, sustainable change in areas of conflict.”
In 2015, Combat Flip Flops’ sales increased 150 percent over the previous year. In keeping with Griff’s original corporate vision, the company donated funds for schools to educate Afghan girls and cleared 1,533 square meters of land mines in Laos, which keeps the local population — especially children — safer.
Griff has leveraged his service academy pedigree and military experience in incredibly productive ways. His entrepreneurial sense and — even more importantly — his worldview defies most veteran stereotypes and associated bogus narratives. His outlook and drive are distinctly that of the Post 9-11 warfighter — “the next greatest generation.”
Combat Flip Flop’s mission statement captures it:
To create peaceful, forward-thinking opportunities for self-determined entrepreneurs affected by conflict. Our willingness to take bold risks, community connection, and distinct designs communicate, “Business, Not Bullets”– flipping the view on how wars are won. Through persistence, respect, and creativity, we empower the mindful consumer to manufacture peace through trade.
Most of us would quietly go home after losing limbs, our eyesight, or other vital capabilities while in service to our country.
But for these six badasses, grievous physical injury was just the warm up:
6. French Legionnaire Jean Danjou led one of the Legion’s most famous fights after losing a hand
French Foreign Legion sappers (Image: Imgur)
French Foreign Legion Capt. Jean Danjou was working as a staff officer in Mexico in April 1863 after losing his left hand while fighting rebels in Algiers. When the command needed an officer to lead a convoy of pay for legionnaires, Danjou volunteered.
Ranger Sgt. 1st Class Joseph Kapacziewski asked doctors to remove his leg after it failed to heal from a grenade blast, then conducted four combat deployments with his prosthetic. Airborne 1st Lt. Josh Pitcher led a 21-man platoon through a deployment to the Afghan mountains with one leg. And Capt. Daniel Luckett came back from a double amputation to earn the Expert Infantry Badge and deploy with the 101st.
4. Master Sgt. Roy P. Benavidez defied doctors to go to Vietnam, then kept fighting after dozens of potentially lethal wounds
Master Sgt. Roy P. Benavidez walked onto a mine in 1965 and suffered an injury that was supposed to stop him from ever walking again. Against the orders of doctors, he rehabilitated himself in secret at night and walked out of the ward on his own power instead of accepting his military discharge.
He was rolled up in a body bag but spit in the doctor’s face to let him know he was alive.
3. Canadian Pvt. Leo Major lost an eye, broke his back, then earned three Distinguished Conduct Medals in two wars
Canadian sniper Leo Major liberated a Dutch town on his own during World War II. (Photo: Jmajor CC BY SA 3.0)
Canadian Army Pvt. Leo Major was severely wounded during the D-Day invasions when a phosphorous grenade took part of his vision. He also could have turned back later in 1944 when a mine broke his back.
His last DCM came during the Korean war when he lead a group of snipers to take and hold a hill from the Chinese Army for three days.
2. Douglas “Tin Legs” Bader lost both legs in an air show accident and then became a stunning flying ace in World War II.
As a young pilot in 1931, Douglas Bader was a bit showy and lost both of his legs after an accident during an airshow caused him to lose both of his legs. He begged to stay in the service but was denied with the suggestion that he try again if war broke out.
Despite this handicap, he fought a massive Spanish fleet in 1797 and managed to capture two of their man-of-wars, using the first one captured to attack the second. But then he lost his right arm at the Battle of Tenerife later that year.
The competition allowed Marines stationed in Japan to test and enhance their shooting abilities.
“The concept of every Marine a rifleman goes back to our basics,” said Sgt. Christian Lee Burdette, an ordinance maintenance chief with Marine Corps Installations Pacific. “We learn basic infantry skills before we learn our military occupational specialty. Every Marine in general has the capabilities to engage any threat with a weapon. With this training, it provides that confidence for a Marine to engage effectively.”
The first day of the competition included a brief morning class to brush the competitors up on their marksmanship knowledge followed by competitors zeroing their rifles. Zeroing is the process of calibrating the rifle combat optic, so the weapon is accurate to where the shooter is aiming. The shooters’ zero is essential, as a faulty zero can disrupt a shooters’ ability to hit their target.
The following week allowed the shooters to practice the various courses of fire. To complete certain courses, the shooters were forced to shoot with their off-hand and eye.
U.S. Marines competing in the Far East Marksmanship Competition engage targets at Range 18 on Camp Hansen, Okinawa, Japan Dec. 13, 2018.
(Photo by Pfc. Brennan Beauton)
“It puts you into unknown situations, instead of just shooting on a flat range and known distances,” said Sgt. Shane Holum, an emergency service crew chief with MCIPAC. “You have multiple targets and you are shooting and moving. You have to work through problems and malfunctions.”
The final week was for score. All of the shooters’ shots were marked and recorded. Marines were able to compete as an individual, a team, or both. Each shooter had to complete the standard Marine Corps rifle and pistol qualification course along with other courses. The additional courses required shooters to fire and maneuver obstacles, and switch weapons while engaging targets at different distances.
Sixteen teams competed on Dec. 13, 2018, in a rifle and pistol competition. To enter and compete as a team, each team must include four shooters. A team must have an officer and a first time shooter. The first time shooter must be at least a noncommissioned officer.
A U.S. Marine shooter and spotters assess the target in the Team Pistol Match finals at Range 1 on Camp Hansen, Okinawa, Japan Dec. 13, 2018.
(Photo by Pfc. Brennan Beauton)
“Any command that is stationed on Okinawa or mainland Japan can come out to the competition,” said Staff Sgt. Stephen Ferguson, an instructor and competitor for the Marine Corps Shooting Team. “You can bring as large as a team as you want, or bring a single shooter. Either way, you can come out and compete.”
The Marine Corps Base Camp Butler’s team won the team rifle competition. The Communication Strategy and Operations Company on Camp Hansen won the team pistol competition, the same day the unit became officially activated. On Dec. 14, 2018, the MCB rifle team was presented with the Calvin A. Lloyd Memorial Trophy, and the CommStrat pistol team was presented with the Shively Trophy.
“Annual qualification is once a year,” said Sgt. Cameron Patrick, an instructor and competitor for the Marine Corps Shooting Team. “Shooting is a very perishable skill so we want you to not just do the qualification, but to try and get out and practice on your own time. Actually refine your skills by yourself. Don’t wait for that one year to come around.”
The top 10 percent of shooters are invited to participate in the United States Marine Corps Marksmanship Championship Competition in Quantico, Virginia, in April 2019. From there they will be evaluated to see if the individual has the qualities of becoming a member of the Marine Corps Shooting Team, according to Patrick.
The Far East Competition is held annually on Okinawa. Marines that want to participate are encouraged to sign up early as slots fill up quickly.
The military has very talented photographers in the ranks, and they constantly attempt to capture what life as a service member is like during training and at war. Here are the best military photos of the week:
A special missions aviator from the 41st Rescue Squadron looks out from an HH-60G Pave Hawk over Grand Bay Bombing and Gunnery Range at Moody Air Force Base, Ga., May 20, 2016. Airmen simulated different combat and rescue situations to synchronize efforts between a variety of Air Combat Command airframes.
An F-15E Strike Eagle soars above Grand Bay Bombing and Gunnery Range at Moody Air Force Base, Ga., May 20, 2016. Multiple Air Combat Command aircraft conducted joint aerial training, showcasing the aircraft’s tactical air and ground maneuvers, as well as their weapons capabilities.
A soldier conducts physical training while deployed with Task Force Red Wolf during Exercise Beyond The Horizon 2016 at San Marcos, Guatemala, May 30, 2016.
A soldier observes a Bradley Fighting Vehicle maneuver on an objective during a U.S. Army Central combined arms live-fire exercise, part of Exercise Eager Lion, at the Joint Training Center, Jordan, May 24, 2016. Eager Lion is an annual two-week interoperability exercise that aims to increase the partnership ties between the U.S. and Jordanian militaries.
NORFOLK, Va. (June 1, 2016) Master Chief Ship’s Serviceman Alberto Sanchez, center, judges a barber competition as part of Surface Line Week Atlantic. Held annually in Norfolk, Surface Line Week brings Sailors and federal civilians together for friendly athletic and professional competitions.
NORFOLK, Va. (June 1, 2016) Seaman Tristen Blair, assigned to the USS Monterey (CG 61), hugs his mother Karla Blair before the ship departs Naval Station Norfolk with the USS Dwight D. Eisenhower Carrier Strike Group (CSG). The ships are deploying in support of maritime security operations and theater security cooperation efforts in the U.S. 5th and 6th Fleet areas of operation as well as the Great Green Fleet initiative. While deployed, CSG ships and aircraft will employ operational procedures and energy conservation measures in order to enhance operational capabilities, enabling strike group units to go farther, stay longer and deliver more firepower without having to refuel.
Marines assigned to Officer Candidate School (OCS) participate in the Combat Course aboard Marine Corps Base Quantico, Virginia, May 11, 2016. The mission of OCS is to educate and train candidates in order to evaluate and screen individuals for qualities required for commissioning as a Marine Corps officer.
Marines assigned to Officer Candidate School participate in the Montford Point challenge aboard Marine Corps Base Quantico, Virginia, May 19, 2016. The challenge consisted of a supply run where the Marines went through obstacles and faced similar physical challenges as the Montford Point Marines.
This Memorial Day we honor and remember those who made the ultimate sacrifice for their country and our freedom.
Pictured here is USCG Cutter Marcus Hanna anchored near the Isle of Shoals in New Hampshire. Photo by Petty Officer 2nd Class Kenny Galanif.
America’s force of inter-continental ballistic missiles, also known as ICBMs, has long been a component of the nuclear triad. The 450 LGM-30 Minuteman IV missiles split between F. E. Warren Air Force Base in Wyoming, Minot Air Force Base in North Dakota, and Malmstrom Air Force Base in Montana provide a very responsive retaliatory option – capable of hitting a target in less time than it takes to get a pizza delivered.
These missiles are kept in silos at those three bases. The silos protect the missiles from the elements – and thus, a lot of work goes into making sure that the missiles are protected, but can be quickly launched. These silos also provide protection from nuclear strikes by the enemy trying to take them out (America, it seems, never got into road-mobile or rail-mobile ICBMs). How do they balance the need for a quick response with protecting the missiles?
The key to this is the door of the missile silo.
This is one of the little secrets about ICBMs. For a very powerful weapon (each LGM-30 carries a single W87 warhead with a yield of 300 kilotons – about 20 times as powerful as the 15-kiloton bomb dropped on Hiroshima), they are very delicate instruments. As in: “Fragile, handle with care.”
In other words: “Use these and it’s the end of the world.”
Even “routine” maintenance of a LGM-30 Minuteman intercontinental ballistic missile is a high-stakes affair.
(U.S. Air Force photo)
For instance, according to a report by Time magazine, a dropped tool destroyed an Air Force LGM-25 Titan II missile, and its silo, in 1980. This fatal incident (one airman died) shows just how little it can take for things to go wrong with an ICBM.
A dropped socket wrench destroyed a Titan missile, like this one.
(Photo by Mathew Brooks)
Now, when nukes are involved, the stakes are high. This is also true when using them. Things have to work, and they have to work the first time. If the roof on your convertible is stuck in the down position, you can get it fixed and the car detailed. That’s just a major inconvenience.
An ICBM silo door getting stuck – that can be devastating.
Thankfully, this Minuteman launch was only a test. If this had been for real, we’d be seeing lots of mushroom clouds.
(U.S. Air Force photo)
Fortunately, there has never been a need to use ICBMs against an enemy. But the effort is always made to ensure the systems are reliable – because one can never know. You can see the testing of an ICBM silo door in the video below.
Hackers screened for their good intentions found 138 “vulnerabilities” in the Defense Department’s cyber defenses in a “bug bounty” awards program that will end up saving the Pentagon money, Defense Secretary Ashton Carter said Friday.
Under the “Hack The Pentagon” program, the first ever conducted by the federal government, more than 1,400 “white hat” hackers were vetted and invited to challenge the Pentagon’s defenses to compete for cash awards.
Of the 1,400 who entered, about 250 submitted reports on vulnerability and 138 of those “were determined to be legitimate, unique and eligible for bounty,” Carter said at a Pentagon news conference.
The lessons learned from the “Hack The Pentagon” challenge, an initiative of the Defense Digital Services started by Carter, came at a fraction of the cost of bringing in an outside firm to conduct an audit of the Pentagon’s cyber-security, he said.
The awards going out total $150,000 while a full-blown cyber audit would have cost at least $1 million, he said. In addition, “we’ve fixed all those vulnerabilities,” Carter said.
No federal agency had ever offered a bug bounty, he noted.
“Through this pilot we found a cost-effective way to supplement and support what our dedicated people do every day,” Carter said.
“It’s lot better than either hiring somebody to do that for you or finding out the hard way,” he said. “What we didn’t fully appreciate before this pilot was how many white-hat hackers there are.”
Carter said the Pentagon had plans to encourage defense contractors to submit their programs and products for independent security reviews and bug bounty programs before they deliver them to the government.
“Worry about the dollars and the pennies take care of themselves.” — anonymous
It’s worthwhile to keep that adage above in mind when you are being pitched to buy a franchise business.
One of the most costly mistakes veterans can make is paying too much upfront for a franchise that you can’t sell for the same price the next day. It’s the venture equivalent of buying a used Chevy for the price of new BMW.
I hate it when I receive letters from veterans who “want out” of a franchise they just bought. They feel snookered, trapped, and annoyed at themselves for not looking at the details before signing on the dotted line.
The best way to avoid buyer’s remorse is to become a smart shopper of franchise opportunities. Here are five tips to help you assess if you are more likely to make money or lose money in the franchise world.
1. Set higher standards
If your objective is to merely “go into business for yourself” or “own a franchise” then your aspirations are not high enough to be a successful business owner. After all, you will achieve your goal of business ownership the day you sign the franchise contract! Then what?
A more purposeful objective is to own a franchise that will make money for you. When you set high standards for your financial return on your invested time and savings your tire-kicking “due diligence” questions become more precise and purposeful.
2. Understand sales rep motivations
When you start to explore different franchise opportunities, you will come in contact with franchisor representatives and business brokers who have just one purpose—to sell you a franchise as fast as possible. These individuals are not your trusted friends or unbiased financial advisors. Certainly don’t sign any franchise agreement without prior review from an experienced corporate attorney who understands franchise valuations and royalty obligations.
3. Add up cost of acquisition
Sneaky franchise brokers are adept at hiding the true investment cost of a franchise purchase. If you sign up to buy a franchise, your cost of acquisition is more than the down payment. Include the amount you have to borrow to acquire the franchise plus other savings you may have to apply to the business until it achieves at least cash flow breakeven. (when net sales revenues exceed expenses every month) This is the total amount you will have at risk in your new business. How comfortable are you with this amount? What would happen if you lost it all?
4. Evaluate owner’s compensation
Another trick of franchise sales reps is to present impressive financial projections of average franchise unit performance. Look closely at these projections. Do they include a budget allocation for the owner’s salary, healthcare, adequate insurance and other real world expenses associated with running a business? If there is no allocation for an owner’s salary and benefits and you intend to work full time in the business, beware!
Remember, year-end profits should be your financial return on your invested capital, not your sole source of compensation for working 40 to 70 hours a week to keep the franchise alive! Of course, the business could fail to generate a profit too which means you as the founder earns nothing for a lot of work.
5. Understand market value
Buy low, then sell high. If you pay $25,000, $50,000, or $100,000 to buy into a franchise, then you should find evidence that other franchises can be sold at least for that much or more. Unfortunately, the opposite is often true.
Research the market for this brand of franchise. What are the average resale purchase prices in your state? Who buys up franchises when the owner wants out? Does the corporate office buy back franchises? What does the franchise agreement call for? Frequently, one regional franchise operator buys distressed properties at deep discounts.
Given all the risks associated with owning a business and personal obligation to repay debt, you should walk away from any franchise that cannot eventually be sold for at least two times your invested capital.
Unfortunately, I get too many letters from franchise buyers who are desperate to get out of a money-losing franchise. They realize they overpaid for a franchise usually within a year of purchase. They didn’t pay attention to the quantitative issues where they could lose hard cash because the sales reps kept their attention on how great it will be to at last be the boss of a money making business. At the end of the day, they didn’t make any money and didn’t have any fun as a business owner.
Now you know better.
Susan Schreter is a devoted Yellow Ribbon Reintegration Program workshop presenter and founder of Start on Purpose, a service organization that empowers business owners anywhere in America to find and manage business funding with confidence. Connect with her at Susan@StartonPurpose.