The three largest franchise companies in the world Yum! Brands, McDonald’s, and Subway between them operate nearly 100,000 locations. Franchising is big business and there are many companies that have gotten in on the act. So how did the modern franchise company first get started? Well it all seems to have started with Isaac Singer the man better known for his Singer Sewing Machines. He had just finished improving on an existing sewing machine of the time and was trying to work out a way that he could distribute them. Although his efforts at the time would ultimately prove to be unsuccessful other people would step in to continue his efforts for their own businesses.
Other famous examples of early franchises include Coca Cola which has obviously worked out very well. They would sell the franchise rights to people looking to open their own distributorships for the Coca Cola product. Also the telegraph system actually used a franchise model. Most of the telegraph stations were owned and operated by railroad companies but the telegraph itself was controlled by Western Union. Early automobile manufacturers also used a franchise model by entering into deals with automobile dealerships that would carry their cars on the dealership lots.
The real turning point for franchising came during the 1930’s. It was during this period that two men Howard Deering Johnson and Reginald Sprague teamed up and formed the first of what would become many restaurant franchises. An early example is A&W Root Beer which used quick service as its theme. This was of course before the modern drive thru. They thought that by charging a fee they could let other people operate using the same name, supplies, food, logo, and even the building design to operate their businesses.
Soon Howard Johnson’s would turn to franchising for their motels. This would be a smart move as the U.S. Interstate Highway System was just starting to be constructed. That would lead to fast food restaurants and roadside motels being built wherever a highway was. And each of them would be eager to serve tired and hungry motorists.
Today the franchising model is used in over 70 different industries across the globe. In just the United States franchise businesses are responsible for doing over 1 trillion dollars in sales annually. They are used in the creation of a huge number of new jobseach year as franchised stores are opened up in different cities all across America and elsewhere. With ever increasing influence and economic power in the business world today the idea of franchising for business has come a long way since Isaac Singer first tried it to help himself and sell a better sewing machine.