A Brief History of Franchising and How the Industry Has Evolved

Rob Lancit

Date

Jul 20, 2017

Have you ever wondered how franchising began? While most of us are familiar with our favorite franchises, not many people know the history of this famous business model.

Following is a Brief History of Franchising and How the Industry Has Evolved

Did you know that franchising dates back to the middle ages? It might not be the exact type of franchising that we see today, but an early model of franchising can be seen as far back as the early 1500s. During the Middle Ages, the most important resource was probably food. Following wave after wave of famine, the wealthy families that controlled the land on which food was grown quickly became the most powerful people living in a given area.

Some of the first noblemen were given their titles through the monarchy in control of the area. Specifically, the king or queen would give powerful individuals or members of the clergy a section of land they were essentially in charge of like a miniature crown. The first lords were given the power to create armies and levy tolls and taxes, as long as a portion of the money collected was paid as tribute back to the castle. This distribution of power is considered by historians to be the first instance of “franchising.”

The Rise of the Modern Franchise

As of today, the modern franchise business model as we know it can be traced back to entrepreneur Isaac Merrit Singer, the founder of I.M. Singer & Company. Singer was the first person to patent a sewing machine that was able to sew 900 stitches per minute. However, because the sewing machines were priced at $120 each, he needed to come up with a plan that could allow 19th century Americans to purchase them. Luckily, he had a partner who came up with installment plans. But, even with installment plans in place, he still needed a better distribution method.

Singer eventually created licensing arrangements that would enable businesspeople interested in selling his sewing machines to do just that—sell them. Upon signing a licensing arrangement, the person would pay a fee (for the right to sell the machines), receive a license for teaching consumers how to use them, and also funds for manufacturing (that were a direct result of selling the machines.) Inevitably, what these "licensees" ended up with was their own businesses (or franchises as we would call them today.)

Another First Famous Franchisor Was Martha Matilda Harper

One early female franchisor was an also entrepreneur named Martha Matilda Harper. Sent away by her father at the age of seven to be a domestic servant, Harper would spend 22 years in this profession before opening her own hair salon in New York City. The Harper Hair Parlor was unique because it included reclining shampoo chairs (unheard of at the time), emphasized comfort and customer service, provided child care, and had evening hours.

Photos of her stunning floor-length hair was her primary advertisement, and customers flocked to her salon to give their hair a treatment with “The Harper Method.” In 1891, Harper also offered some of the first low cost franchise opportunities, allowing salons to open under the Harper name. She also provided motivation, coaching, advertising assistance, and motivation to build up would-be entrepreneurs - just like the franchises of today!

If you’re interested in owning and operating your own business but find the help and guidance of an established brand appealing, becoming a franchisee may be right for you. In fact, some business owners (who now own their own companies) found that the experience of owning and operating a franchise gave them the skill sets needed to open their own businesses. To learn more about owning and operating a franchise or find low cost franchises for sale, please feel free to browse our site.

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