Franchising: An In-depth Look to a Growing Business

An in-depth retrospective insight on where the practice of franchising began, where and when this business practice originated or took place and who were the pioneers who started practicing it and made it the business venture it is today.

Foundations of Franchising:

The world we live in has turned into an amazingly small place due to certain factors such as franchising. Famous fast food chains, brand name clothes, electronic gadgets, automobiles that are usually restricted only to the geographical location where it originated and we only hear of via internet or television become readily available thousands of miles away in another country. Through this, someone from Europe can now wear the fashion of Asia or eat the delicacies of India in America.

But one might ask, “How is this possible through Franchising?” Franchising basically is the granting of rights to sell the product of and use the name of the company who developed the product to another retailer or “franchisee” may it be locally or internationally.

In retrospect, the word “franchise” originates all the way back to Anglo-French which means liberty or freedom. The practice of franchising came from medieval times where landowners in Europe granted rights to peasants to conduct business and hunt or even hold markets within the landowner’s domain.

The Forefathers of Franchising:

It wasn’t until the year 1811 that a man by the name of Isaac M. Singer started the practice of franchising that we know today. Isaac M. Singer was the developer of the modern sewing machines and was very eager to look for a broader distribution line for his products but, unfortunately, did not have enough funds to increase manufacturing. In addition, he encountered problems with the franchisee being unable to grant the training on how to operate the machines to consumers who needed it. Thus, Singer started to impose a fee for licenses to the franchisee. These licenses granted the training that the franchisee needed which in turn created big opportunities to provide the first ever commercially produced sewing machine to the masses.

From the year 1902-1984, Ray Kroc optimized franchising via licensing of the brand name or trademarks, and the whole business concept as a means of rapidly growing the business changed. A milk shake shaker sales consultant, he was the one who discovered the McDonalds brothers’ small burger stall and established himself as a licensing agent for the brothers and enlist franchisees all over America after which he bought the brothers’ interest in the business. Since then, McDonald’s became the most successful fast food chain, not only in the American continent, but also all over the world.

Similar to a tree that extends its branches and at the same time bears fruit, so do small businesses that want to expand and increase profits opt for franchising. It provides a fantastic opportunity to reach worldwide popularity and have your business reach the far ends of the world. For budding business tycoons who don’t know where to start in business, franchising is the preferred path to take.