The History of Franchise Businesses

A franchise business is a business model that allows other people to use an established brand name, identity and services in exchange for a fee. Many companies in recent history have had huge success with this way of optimising income, most notably McDonalds, among other fast-food chains and coffee shops. But franchising has a surprising history long before McDonald’s story.

The idea of franchising is an incredibly important model in the world of business as it helps companies grow their own operation and expand their reach while also encouraging entrepreneurship.

The Prokil Franchise are proud to be a successful part of the franchise business history.

In this blog, we share the fascinating story of this business model type.

01

Early Origins of Franchising

Medieval Franchises

The idea of granting rights or permission to run a business in exchange for money can be traced right back to feudal Europe in medieval times.

During such times, lords would grant peasants in their area the right to operate a business. The one condition would be that they had to share part of their profits with him in order to do it.

Martha Matilda Harper

From this early and humble idea of a franchise, we then fast forward to the beginning of the 19th century, when we see the first modern business franchises start to take shape.

It is believed that the first franchise business was set up by Martha Matilda Harper in Canada. Having worked as a servant for 25 years, she saved enough money to open her own hair salon. Her organic shampoo gained a lot of attraction thanks to its ability to repair damaged hair, and she soon found that she needed to expand to meet demand.

Rather than setting up another salon in the city, she selected 100 women, most of whom came from a similar background, to become franchisees. She provided training, support and her reputation so that they could start their own successful businesses. There is evidence that, at her peak, Martha had over 500 shops operating across the US, with hundreds of employees working under her brand.

Singer Sewing Machines

However, while noted as the first franchisor, there are some details of modern-day franchise businesses that Martha didn’t implement.

Because of this, many believe that Isaac Singer, founder of I.M. Singer & Company, was the first modern-day franchisor.

Isaac Singer created a revolutionary sewing machine that was able to sew up to 900 stitches a minute. This made clothing production far more efficient, and the machine quickly became a highly sought-after product. Similar to Martha, to meet demand, Singer decided to enlist the help of others and licensed the rights to sell his product to entrepreneurs across the US.

The difference with his set-up was that he charged them an upfront fee for the right to sell the machine – marking the start of what we know of franchising.

Beer

As the 19th century progressed, the idea of franchising a business continued to develop.

With this, beer became the next product to experience the model.

In the 1840s, Spaten, a German brewer, started to allow local taverns to stock and sell his beer along with using their brand name. But to do this, they had to pay.

02

The Rise of Franchising in the 20th Century

The 20th century saw a boom in business across the globe, so it was only natural that the number of franchise businesses quickly increased.

McDonald’s

McDonald’s opening and becoming a franchise business was a key milestone in the development of modern-day franchising.

The McDonald brothers had set up a successful fast-food restaurant in California. In 1954, Raymond Kroc approached them with a vision.

As a renowned salesman, Kroc had a vision to help the brothers reach new areas and audiences with a franchise business model. In doing this, he set up the first McDonald’s franchise in Illinois.

Nine years later, there were 500 McDonald’s franchise restaurants across America, and today, there are around 36,000 across the globe – 80% of which are franchises.

It is this business model that we know as modern-day franchising and Kroc’s vision and work created a well-respected and used business model.

More Fast-Food Chains

It didn’t take long for other fast-food restaurants to implement the business model and expand their reach.

KFC, Wimpy, Wendy’s, Burger King and Taco Bell are all examples of the fast-food industry exchanging brand identity, support and products for money.

03

Expanding into Other Industries

Having seen the success of McDonalds, Burger King and many more, other industries wanted to experience the benefits of the business model.

As time passed, brands such as Holiday Inn, H&R Block, Europcar and many more explored the business model and set up franchise businesses across the globe.

The more businesses that did it, the more the model developed, and several key aspects of the model we know today were introduced:

  • Standardised training
  • Operations manuals
  • Marketing support

Become Part Of The Franchise History

The history of franchise businesses is still developing, with thousands of franchisees opening new businesses across the globe.

Some big, global corporations such as McDonald’s and Starbucks, others are smaller businesses expanding across the country.

Prokil Franchise is excited to be part of the story, offering exciting business opportunities to those looking to start a business of their own.

We have a range of franchises locations available across the south of England, including in Basingstoke, Bristol, Cornwall, Oxford and beyond.

By choosing to franchise with us, you will benefit from:

Discover if you qualify for our franchise opportunity today, and get in touch with us to learn more. Call us on 01202 515566 or complete our online contact form.