||The History of Franchising
Franchising has existed a long time. In the 1850’s, the I. M. Singer & Co. inadvertently created one of the first embryonic franchise networks to distribute and sell its sewing machines to a then-skeptical public. Despite its early roots, franchising did not truly come of age until the late 1950’s and the decade of the 60’s. Before that, only automobile manufacturers, soft drink bottlers, and gasoline companies used franchising regularly as the prime vehicle for marketing and distributing their goods, with one major exception. In the 1930’s, in the midst of the Depression, Howard Johnson established a chain of 25 Howard Johnson roadside stands licensed to franchisees.
In the 1950’s and 60’s Holiday Inns, Roto-Rooter, Dunkin Donuts, McDonald’s, Burger King, H & R Block, Lee Myles, Midas, 7-Eleven, Dunhill Personnel, Baskin-Robbins, Wendy’s, Kentucky Fried Chicken, Pearle Vision Center, and Sheraton geared up and franchised. Beginning with those chains and continuing today with franchise networks, two hallmarks may be identified; a trademark and a uniform product or service. The Big Mac tastes the same in Maine as it does in California; the restaurants look the same in Arkansas as they do in Toledo; and the name outside is always branded the same around the globe.
Franchising promotes uniformity. A primary benefit for an entrepreneur who acquires a franchise is he/she does not need to “reinvent the wheel” and in the process make mistakes that are hard to correct. Starting a business can be an expensive and a daunting step. Following someone else’s proven system and methods, and using their brand name by acquiring a franchise, has for many been the best solution for becoming one’s own boss and succeeding. There are three basic types of franchises: