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In the Beginning…
The franchise business we know today is a far cry from its historical beginnings.  Taken from the French, the term refers to the ability to hold a particular right or privilege.  During the Middle Ages, with the feudal system at its height, most of the population consisted of lords and vassals.  The lords were the property owners, and the vassals worked the land.  Eventually there arose a tradesmen’s class that helped move goods from one market to another.  Whatever goods the lord’s estate did not consume were offered for sale at local fairs.  Rather than operate these markets themselves, the local rulers licensed the rights in return for a share of the proceeds.  Eventually other elements vital to commerce came under this umbrella, such as the operation of ferries across bodies of water, the building of toll roads and bridges, and even the brewing of beer.  Other scholars place the franchise concept even further back in time, with one claiming the Romans instituted the practice among food sellers, while another insists a Chinese businessman sold retail goods in this manner as far back as 200 B.C.E.  Well, you know those historians – they never seem to agree on anything!

Flash Forward a Millennium Or So
In Germany in the 1840s, a consortium of brewers decided they would sell their ale only in specific taverns.  This model is much closer to the framework we see in today’s franchise operation.  An establishment is allowed to sell Item A, but only in return for not carrying Item B, which is made by a competitor.  It’s the Pepsi versus Coke controversy, multiplied a hundredfold.  When brewers began migrating to the New World, they brought this concept along as well.  Most people agree, however, that the first true American franchise began in the sewing machine business.  In 1851, Albert Singer decided he could move a lot more machines over a much broader area by engaging others to do his selling for him.  Rather than sink his own money into opening Singer Sewing Machine Stores in every hoot and holler across the country, he drew up what is generally considered to be the first franchise agreement, a contract with prospective agents who would be given the right to sell his devices in a particular geographic area in return for a percentage of the sale – and by agreeing not to sell anything that would compete with their ability to market the Singer line.

Food Franchises
Today, when people are asked to name a popular franchise, nearly everyone thinks first of food.  Shortly after the end of the American Civil War, Frederick Harvey got the idea of setting up franchises of his Harvey House restaurant in train depots across the west.  By the end of the 1880s, when the transcontinental railroad became the way people and goods moved across the country, one could find a Harvey House nearly every hundred or so miles along the Atchison, Topeka and Santa Fe line – a railroad that accounted for 12,000 miles of track!  The early part of the 20th century saw the rise of such long-lasting franchise names as A&W Root Beer, White Castle, and Howard Johnson’s.  A great many fast-food chains got their start a long time ago as well, including Kentucky Fried Chicken (now simply known as KFC) in 1930, Carvel’s [ice cream] in 1934, Dairy Queen in 1940, and Dunkin’ Donuts in 1950.

The Mobility of America
One of the reasons given for the success of the franchise is the high rate of mobility among Americans.  We love to buy things from people we trust, and one of the hallmarks of a franchise operation is the ability to buy the same quality goods at the same price whether you’re in Portland, Oregon, or Portland, Maine.  The auto manufacturers, the primary impetus behind this mobility, actually began franchising – they called them dealers – nearly as soon as they began making cars.  What soon followed were franchises for spare parts, like Western Auto (founded in 1909), as well as gasoline distributorships.  Nearly every type of consumer good or service eventually found its way into the franchise world.

The Future Looks Bright for Franchising
It is estimated there are currently more than 3,000 franchisors and more than 500,000 franchisees in the United States.  Many of these corporations have expanded overseas as well.  Thanks to the creation of fair trade practices overseen by the federal government, becoming the owner of a franchise is safer than ever.  Every year brings about a new concept in franchising – including pretzel wagons, pet clean-up services, and falafel stands – and the future of such ventures are limited only by one’s imagination and ability to convince someone else to buy into the concept.

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