Franchising - a short history
Franchising - a short history
This franchise model was copied in several industries. Coca-Cola was able to expand throughout the United States by shifting the burden of manufacturing, storing and distributing its product to local business people who acquired bottling rights. Car manufacturers who had been spending enormous amounts of capital tooling their assembly lines found they could develop retail distribution networks using capital provided by independent dealers. Oil companies such as Standard Oil and Texaco granted franchises to convenience stores and repair mechanics across the US. In the 1950's Ray Kroc saw the potential in franchising a successful hamburger stand. He has been compared to Henry Ford for bringing the assembly line to the fast food industry. Be they coffee and sandwich bars, fried chicken, pizza or taco diners, many food outlets are now franchised.
Franchising a short history - To learn more about this author, visit Diarmuid Kieran's Website.
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Franchising as we know it today originated with the Singer Sewing Centre developed by Isaac Singer in 1858. After he had invented the sewing machine, Singer encountered two problems when he took it to the market. The first was that customers had to be taught how to use the new invention before they would buy it. The second was that Singer did not have enough capital to manufacture his machine in large numbers. He then came up with the idea of selling the rights to local business people to sell the sewing machine and train those who bought it. Once he embarked on this route his enterprise expanded rapidly. Fees earned from the licence rights helped to fund his manufacturing costs and, because each franchise was self-financed, Singer was able to tap into the entrepreneurial attributes of his franchisees.
This franchise model was copied in several industries. Coca-Cola was able to expand throughout the United States by shifting the burden of manufacturing, storing and distributing its product to local business people who acquired bottling rights. Car manufacturers who had been spending enormous amounts of capital tooling their assembly lines found they could develop retail distribution networks using capital provided by independent dealers. Oil companies such as Standard Oil and Texaco granted franchises to convenience stores and repair mechanics across the US. In the 1950's Ray Kroc saw the potential in franchising a successful hamburger stand. He has been compared to Henry Ford for bringing the assembly line to the fast food industry. Be they coffee and sandwich bars, fried chicken, pizza or taco diners, many food outlets are now franchised.
Franchising a short history - To learn more about this author, visit Diarmuid Kieran's Website.
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John PowerJohn Power, founder of Biltmore Franchise Consulting, has extensive experience developing and marketing franchises and business opportunities. He has been in and around franchising for over twenty years. From 1980 through 1990 he conceptualized, organized, and developed the American Video Association. He grew AVA to 2,000 national members, before selling the company it 1990. It was later merged into another home video marketing company. From 2000 to 2005 he worked as a contract marketing and human resources consultant to several local and national companies. In 2005 Mr. Power began working as a franchise development consultant on a full-time basis. Since that time he has helped more than three dozen companies initiate and develop their franchising program. He notes that there are many companies interested in developing a franchise program, and who need his specialized assistance. Mr. Power is a “hands-on” franchise consultant. He said, “I am the ‘nuts and bolts’ person who tends to the details for my clients.” Mr. Power holds a B.S. degree with a major in Marketing. See: www.biltmorefranchise.com You may contact Mr. Power at: jpower@biltmorefranchise.co - Visit John Power's Website |
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