The History of Franchising The origins of franchising can be traced back to the middle ages (400 A.D. – 1500 A.D.). At that time, it was an accepted practice for local governments to offer important persons, even high church officials, a license granting them the right to maintain civic order and to make special tax assessments. Courts or lords could also grants rights to others to operate ferries, hold markets, and perform the business activities today carry out by professionals and craft guilds. The licensee (or franchisee) would pay the licensor (franchisor) a specific fund from the tax revenues collected or assessments made and in return receive military or other forms of protection.
Queen Isabella of Spain probably used (invented) a franchising system when she award Christopher Columbus a “franchise” in 1492 to develop travel and trade with the new world. It is fascinating that from the new world franchising would be introduced and re-established in the 20th Century.
Additional progress was made during the early 19th century in England when tavern and pub owners, while experiencing financial hardship, turned to brewing companies for financial assistance. The tavern and pub owners in return for financial assistance were required to purchase all of their beer from that specific brewer.
In the United State, franchising developed in the 1850’s when the Singer Sewing Machine Company formed a franchise in 1851. Agents were commissioned to demo, sell, and repair the Singer line.
In the late 1889, Robert Metzger was the first franchisee of Ford…before him; Fords were sold directly from the manufacturing plant. Ford began establishing dealers.
Rexall Drug stores – 1902 Western Auto – 1909 Howard Johnson – 1925 McDonalds – 1955 Kentucky Fried Chicken – 1955 International House of Pancakes – 1959 IHOP
THE HISTORY OF FRANCHISING - To learn more about this author, visit Ken Hollowell's Website.
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