Franchising Industry Has History Behind It

Franchising (in old French the term means privilege or freedom) started in the Middle Ages in Europe when the local ruler of the place granted privileges to hold a fair or operate a ferry. It gradually extended to granting permissions in order to brew ale and run taverns. It was like giving someone license to operate a monopoly business. The rules became a part of the European Common Law. The term franchising in the modern context was used first in 1851 when Singer Sewing Machine Company began granting distributorship rights to individuals. In the beginning, franchising was all about distributing finished goods, but the scene started to change when WWII veterans returned and settled down to raise their families. The resulting baby boom of 76 million births in America changed the business world and the face of franchising itself. As demand for all kinds of products and services increased, business format franchising (the kind that is popular today) was introduced and there was a rapid expansion of the fast food industry (which still is recognized as the most important franchise category).

But as with everything else, corruption soon entered this form of business too. Unscrupulous business owners duped people and ran with their money whereas financially poor companies provided franchise business for sale offers, but without the necessary infrastructure to support them. So, in order to introduce a proper system in the industry, the Federal Trade Commission introduced some rules and regulations in 1978. Accordingly, all franchise opportunities had to submit a written document called the Uniform Franchise Offering Circular or UFOC to the people who were inquiring about starting a franchise with them. The UFOC had to be submitted before any franchise agreement was signed and any money changed hand. The prime aim of submitting the UFOC was to make the franchisee know where he was getting into. The International Franchise Association was also formed to bring an aura of professionalism into an arena that was sometimes becoming very chaotic.

Today, franchising is an integral part of the American business scenario. It accounts for a business of over $2 trillion! This industry has more chance of succeeding than a stand-alone business. It is estimated that for every 12 new business that opens in the United States, 1 is a franchise business. With economic slow-down hanging over the market and corporate America downsizing, franchising is becoming the bread-and-butter earner for many households. The future also looks very bright for the people who wish for buying a franchise. The new FTC rule that will become compulsory by July 1st this year will make this line of business even more transparent and safe. There are some new categories that have immense potential such as the senior-care, handyman, child-education and pet-care industry. So, if you were toying with the idea of joining the franchise industry, start acting on it immediately. Browse through the website to get further details.


Founder/CEO of brandEXPANSION the only firm of its kind serving all aspects of franchising. With our industry background and successful franchise units established around the world, we have a time tested strategy to assist you in locating, developing, advertising, marketing and executing the optimal franchisor and franchisee strategy. brandEXPANSION brings over a dozen years of hands on experience in the field. This gives us an insider’s perspective on the business of franchising, which is an in...

Go Deeper | Website

Want More?

New Graphic
Subscriber Counter