1. German Brewers...
Many historians argue the formations of franchising began much earlier than the introduction of Isaac Singer and his singer sewing machine. In fact, it originated with German brewers in the 1880s who granted franchising rights to certain taverns giving them the right to sell their ale, under the trade name SPATEN...
2. Singer Sewing Machine...
However, franchising as we know it today blossomed with the Singer Sewing Centre developed by Isaac Singer in 1858. Isaac Singer was the first to mass license his product, and he made millions for himself and his franchisees. After he had invented the sewing machine, Singer encountered two problems when he took it to the market.
The first was that customers had to be taught how to use the new invention before they would buy it. The second was that Singer did not have enough capital to manufacture his machine in large numbers. He then came up with the idea of selling the rights to local business people to sell the sewing machine and train those who bought it. Once he embarked on this route his enterprise expanded rapidly. Fees earned from the licence rights helped to fund his manufacturing costs and, because each franchise was self-financed, Singer was able to tap into the entrepreneurial attributes of his franchisees.
3. Coca-Cola...
This franchise model was copied in several industries. Coca-Cola was able to expand throughout the United States by shifting the burden of manufacturing, storing and distributing its product to local business people who acquired bottling rights.
4. Automobiles...
Car manufacturers who had been spending enormous amounts of capital tooling their assembly lines found they could develop retail distribution networks using capital provided by independent dealers.
5. Oil Companies...
Oil companies such as Standard Oil and Texaco granted franchises to convenience stores and repair mechanics across the US. In the 1950's Ray Kroc saw the potential in franchising a successful hamburger stand. He has been compared to Henry Ford for bringing the assembly line to the fast food industry. Be they coffee and sandwich bars, fried chicken, pizza or taco diners, many food outlets are now franchised.
6. Fast Food/Restaurants...
The franchise system accelerated with the rise of fast food restaurants in the 1950s with the most successful being that of McDonalds. In fact McDonals is recognised as the most successful franchise system the world has ever known!
Franchising has been cited by industry analysts as the motivating force driving the US economy in the early 1930s and late 1950s helping America recover from an economic slump and to boost the nations's national and international economic relations.
In the US today, franchising accounts for 21 million new jobs created between 2001-2005 with over 140,000 franchise establishments earning $2.3 trillion in economic output.
In the UK & Ireland, franchising accounts for 397,000 jobs, with over 1,000 active franchises earning £11.9 billion in economic output.
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