The History Of Franchising
Franchising is a rich and interesting part of American business history. Today, franchising continues to be a core factor in global innovation. Throughout the history of franchising, there have been several notable touchpoints where trailblazers have established tactical business arrangements that closely resemble franchising as we understand it today.
The history of franchising started in the Middle Ages when people would enter agreements with tax collectors. The monarchy in England and other parts of Europe would bestow land to their citizens in return for cultivating armies, carrying out tax collecting duties and building toll roads.
However, the practice in its current form didn't flourish until the 20th century in America, though there have been several notable case studies of franchising opportunities before then.
What was the first franchise?
The first franchise was in 1731 when Benjamin Franklin entered an agreement with Thomas Whitmarsh in Philadelphia. Though they termed their agreement a 'co-partnership' - as the word 'franchising' hadn't been invented yet, the agreement terms looked suspiciously like a franchise for sale Philadelphia, where they negotiated branding and disbursement rights. Whitmarsh would be given the rights to print Franklin's works in exchange for buying his printing materials exclusively from Franklin. Later, Benjamin Franklin would enter franchising agreements with several vendors.
When did franchising start?
Franchising started in 1731with Benjamin Franklin's 'co-partnership' business agreement but really hit its stride in the mid-20th century when beverage and Texas food franchises became highly popular and profitable. Since then, franchising expanded to incorporate a number of industries, such as fitness gym franchises, accountancy, photography, automation, and so forth.
Some high-profile franchises that helped normalize franchising as a lucrative business investment include:
- Coca Cola - the global giant, which has consistently ranked in the top five richest companies in the world, started as a franchise. In 1889, the company began to sell the rights to businessmen owning the means to produce it on a large scale. Part of its success was its recognizable bottle shape and patented secret formula. Coca Cola's ingenious franchising system also allowed them to uncover new untapped markets and territories, allowing the sensation to sweep across the world.
- 7-Eleven. The popular retail franchise had a humble beginning as a handful of convenience stories. However, one of its founding directors, Joe Thompson, ensured that the staff would be trained and given uniforms so that customers would receive the same quality of service at each store. The franchise also stumbled upon a niche in its unprecedented opening times - 7am to 11pm.
The 20th century also saw the beginning of a number of other highly popular and successful franchise business plans, such as Western Union, Wendy's, Hertz, and hundreds more.
Who invented franchising?
Franchising was invented bya number of ambitious people. Though technically it has no founder, it has a long history of innovation and well-judged investments.
For example, one of the earliest franchises was the Singer sewing machine, developed by Isaac Merritt Singer in 1851. Singer traded local company control for a share of the profits, a straightforward way of expanding his brand of sewing machines. Singer also provided each franchised factory with the equipment and specialized products to enable a consistent and recognizable brand. The Singer sewing machine empire continues today, shaped by Singer's legacy of clever branding and distribution rights. Singer's franchising displays the power and longevity of successful franchising.
If this article has inspired you to consider owning a franchise, you can book your free consultation on our home page. Guerrilla Franchising is proud to offer an expertly chosen selection of franchising opportunities across various industries and parts of the USA. We match franchisees with their perfect opportunity and support them throughout the management process. To discover more about our services, please get in touch.