German Brewers

Some historians claim that franchising was formed much before Isaac Singer’s sewing machine. The concept is attributed to German brewers that granted franchise rights to certain pubs, which allowed them to market their beer under the name Spaten.

Isaac Singer

Isaac Singer, a New Yorker, created the Singer Sewing Center in 1858. Singer faced two challenges when he brought his sewing machine to market. First, customers needed to learn how to operate the machine before buying it. Singer didn’t have the capital necessary to produce his machines in mass quantities. Then he came up with an idea to sell rights to local businesses to help them market the machine, and to train the people who buy it. His business grew rapidly once he started down this path. The fees earned by the licensing rights were used to finance his manufacturing and because each franchise self-financed Singer could tap into his franchisees’ entrepreneurial abilities. Isaac Singer, the inventor of mass licensing his product and his franchisees made millions.

Coca-Cola

This model has been copied by several other industries. Coca-Cola expanded throughout the United States after shifting manufacturing, storage and distribution to local businesses who purchased bottling rights. For Franchise My Business advice, visit www.ashtonsfranchise.com/franchise-my-business/

Fast Food Restaurants

Ray Kroc, in the 1950s saw potential for franchising hamburger stands. In the 1950s, the franchise system was accelerated by the growth of fast-food restaurants. McDonald’s became the biggest success. Industry analysts have cited franchising as the driving force behind the US economy between the 1930s and the late 1950s. It helped America recover from a recession and boost the nation’s economic relationships at home and abroad.

Franchise Today

The British Franchise Association reports that in the UK:

• Franchise industry generates £17 billion for the economy.
• One thousand brands are active in various sectors, such as coffee, cleaning and home care.
• The franchise industry employs 710,000 people.
• In total, there are 48,000 franchised outlets.
• 93% of franchises are making a profit.