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The History of Franchising - The Creation of the Franchise Business

Posted in New Franchises by admin on April 7th, 2008
Tip! ) Transitioning an existing unit to a new franchisee, which has been terminated, but still operating it until sold.

The franchise business has been around a long time, in fact they go back as far back as the 1850’s. The notion of selling off a business or a part of a business in order to expand into new areas usually came from the lack of investment funds from the business owner. Through their creativity they were able to keep the business alive by selling franchise opportunities to would-be entrepreneurs.

Tip! Be honest. In franchise sales, honesty truly is the best policy.

While the business of franchising has grown over the years it all had to start somewhere. The concept of franchise businesses began with none other than the sewing machine manufacturer, Singer.

The Singer Franchise Business Opportunity

In the 1850’s the Singer Company produced sewing machines but didn’t have enough capital to actually pay their salesmen salaries. Instead, they created a network of dealers. These first franchise owners paid Singer a fee to work in a particular territory and earned money for each sale of a sewing machine they bought from the company and resold.

Tip! ) Franchised Business Opportunities often have financing available and this makes the financing much easier and generally better rates.

Their significance in the start of the franchise and the opportunities it created came from the creation of the contract that is still used today between the original business owner and the new entrepreneur. Many feel the contract was what really sparked the creation of franchises in the future as it allowed business owners to keep some control over how the franchisees were run.

The Coca-Cola Company Franchise Business Opportunity

When Coca-Cola was originally created, it was only sold as a fountain drink. In 1899 two men obtained a short 600-word contract and the permission to bottle the soda.

Tip! ) Franchise Organizations and Companies sell products to customers for money; The Catholic Church sells perceived eternal salvation in trade for tithing.

Thomas and Whitehead soon realized that even though they had a great idea, they couldn’t afford to actually create a bottling company. As an alternative, they created a franchise company selling the right to bottle the product to individual bottling plants.

The KFC Franchise Business Opportunities

One of the most famous start-ups in the franchise industry was Kentucky Fried Chicken. The franchise opportunity began when Harlin Saunders, or the

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