The concept of franchising dates from the Middle Ages when a king would grant a knight or some other person the exclusive right, or franchise, to govern part of his domain. Markets and other commercial activities were also conducted under franchise. For this right, or franchise, the knight would pay the king appropriately in food, services, or money.
Franchising first appeared in the United States about the time of the Civil War. The Singer Sewing Machine Company is generally regarded as the first to franchise dealers as a method of distribution. However, it was during the early part of this century that franchising first became popular when the automotive, gasoline, and soft drink industries began to offer their products via franchises.
The modern era of franchising really began in the 1940s and 1950s when many of today's most popular retail franchises began. Although there were many franchises in operation by this time, Ray Kroc, who began offering McDonalds franchises in 1955, was one of the first to offer a completely "turnkey" operation. Some of todays most well known franchises were started during this period: Burger King (1955), Holiday Inn (1952), Kentucky Fried Chicken (1957), McDonald's (1955), Midas Muffler (1956), One Hour Martinizing (1949), Snelling Personnel Services (1956), Tastee-Freez (1950), and a host of others.
Today it is hard to think of a product or service that isn't marketed via a franchised business. According to the International Franchise Association, 40.9% of all retail sales in the United States - over $800 billion - were made in franchise operations in 1992. It is estimated that over $1 trillion, representing half of all retail sales, will be made at a franchise location by the year 2000.
There are currently more than 800,000 franchised businesses in operation in the Unites States with a new one opening about every 8 minutes of every business day. More than 8 million people are employed by franchise establishments with an average of 8 to 14 employees per business. If you are looking to buy a franchise you will need to choose from the more than 3,000 different operations being offered today.
