Starting a franchise is an exciting foray into entrepreneurship. Franchise owners have a plethora of opportunities to succeed, learn, and grow their entrepreneurial skills, all with a lower failure rate compared to that of new start-ups. With the added benefits of ongoing support, operational guides, and a proven business model, becoming a franchise owner remains a lucrative option for entrepreneurs. To discover how to become a franchise owner, read on for the five main steps you’ll need to complete to achieve success. What qualifications do I need? According to the data science team at Zippia—an online recruitment site—the majority of franchised companies require potential owners to hold a bachelor's degree in business, accounting, or a related field. Owners with at least two to four years of work experience in the related field are strongly preferred. Soft skills—including clear communication, leadership, and people management—are highly sought-after. Franchise ownership involves managing people and implementing someone else’s brand guides, so professionals with a background or experience in managing set themselves up for success as franchise owners with these skills. Beyond baseline education and experience, franchise owners should possess an indelible passion for learning and growing. Owning a franchise is no easy task—it takes continual dedication and motivation to achieve success with long nights, early mornings, and round-the-clock care. How to become a successful franchise owner in 5 steps. To be a franchisee, you’ll want to have a complete understanding of the situation you’re investing your time and resources into, choose a franchisor you trust and remain adaptable as the business evolves. 1. Conduct thorough research. The obvious first step to becoming a successful franchise owner is to do your research about potential franchise opportunities in your market. By conducting in-depth research, you’ll avoid saddling yourself with a poorly-performing franchise. The primary research you conduct can (and should) take many forms, including: Researching online - Figure out the industry you’re interested in finding a franchise in, and then do your research on the most successful chains you can take part in. Reading the Franchise Disclosure Document (FDD) - Once you’ve found one (or a few) franchise options, request and read the FDD thoroughly to understand the investment, expectations, and support you’re guaranteed as a franchisee. Contacting current franchisees - Talk to professionals who currently own and operate the franchise. Not only will you build out your network, but you’ll get to hear first-hand experiences of owning that franchise. Visiting franchises in person - Walk around the nearest location of the franchise and observe how it works. Do you like the processes you’d have to implement? Are you passionate about the way they serve their clients and do business? 2. Understand the costs. Becoming a franchise owner requires a significant investment. Depending on the type of franchise you choose, costs may include: Initial start-up fee - Depending on the franchise, the start-up or franchise fee varies widely. Some franchisees pay as little as $10,000 to start, while others pay upwards of $500,000. Ongoing royalty fees - Usually between 3% and 12%, the franchise company receives an ongoing royalty fee from each location’s profits. Marketing/advertising funds - While not every franchise requires its franchisees to contribute to an advertising fund, marketing is non-negotiable, costs money, and should be factored into the bottom line. Operational costs - Don’t forget about run-of-the-mill costs to keep the franchise operating at full capacity. Operating costs include software, construction, equipment repair, and new uniforms for employees. 3. Meet with the franchisor. Once you’ve chosen the franchise you’re excited to become a part of, meet with the franchisor (or their representative) to apply, ask the essential questions, and satisfy any concerns you may have. Applications are available online for most franchises, along with pertinent information you should have already read during your research. If a franchisor approves your application, you may receive an invite to something called a “Discovery Day,” where both you and the franchisor spend time getting to know each other and deciding if the other is a viable business partner. Discovery Days can be intense, like a day-long job interview, so preparing yourself with conversations from current franchisees makes all the difference. 4. Secure financing Despite the hefty buy-in of owning a franchise, potential franchisees don’t need to pay completely out of pocket. In fact, there are many loans, grants, and programs available to help franchise owners get the funding they need. When wondering how to be a successful franchise, owners can take stock of their finances to decide how to proceed. The Small Business Administration (SBA) offers government-backed loans to help entrepreneurs get their businesses started. Some large franchises offer payment plans or funding help to get franchisees started. Choosing to run a partnership splits the burden of expense in half (or thirds) and may help you avoid taking out a loan from a bank. 5. Be adaptable and willing to learn. Once you’ve done your research, chosen a franchise, and secured funding to embark on your dream, ensure your mindset is ready to work. Becoming a franchise owner isn’t just about the applications and funding. Many responsibilities go into owning a franchise to ensure its long-term success and profitability—including a spirit of flexibility, open-mindedness, and growth. Franchisees should adapt to change. When the overarching company shifts products, services, or processes, it’s the responsibility of the franchisee to take that change in stride and enable their location to thrive. With that quick-changing, open mindset, franchisees can turn problems or inconsistencies into opportunities to thrive. The ability to “roll with the punches” and prioritize the business’ success over personal thoughts and feelings contribute to the overall success of the business. How do I get paid as a franchise owner? The revenue from a location pays franchise owners, so the more successful a franchise is, the more an owner stands to make. Many franchises offer multiple revenue streams and don’t have the standard, flat-rate salary. The specific methods of compensation should be outlined in the FDD and the agreement you sign when you become a licensee. You’ll discover whether the franchise is percentage-based or fixed for royalty fees, which in turn affects the location owner’s net worth.