Franchises for Sale: Historical Trivia


The word ‘franchise’ has its origins in the old French word for ‘ liberty’, meaning the freedom to do something.

  • Back in feudal times peasants were given franchise rights by the local lord, for example to operate a ferry, operate a ferry or draw water. Whereas today’s franchisees are given the right to operate under a recognised brand with marketing and administrative support, the peasants were given protection from marauders.
  • Franchise can also be a synonym for suffrage or the right/eligibility to vote. 
  • Tied pubs, where a pub tenant agrees to stock only the products of a specific brewery in return for financial and marketing support, are one of the oldest examples of modern franchising.
  • The franchise system in its modern incarnation traces its roots back to the Singer Corporation. Founding his eponymous company in 1851, Albert Singer used the franchising model to distribute his ground-breaking sewing machines around the US and was the first entrepreneur to prepare contracts setting the terms of the franchisor-franchisee relationship.
  • Noting the success of Singer’s innovative new business model, many American businesses followed suit, including A&W Root Beer and Howard Johnson’s.
  • After World War II ended, however, franchises for sale really proliferated. Having a centralised head office to offer national marketing campaigns meant franchising was the perfect model for the new consumer society in which advertising was critical to a brand’s success.
  • Coca-Cola adopted the franchising model to transport its iconic drinks around the country. Desperate to reduce transportation costs without divulging its secret recipe to franchisees, the company insisted on producing the drink in-house but produced it in syrup form, to which franchisees could later add water.
  • McDonald’s was also pivotal in the development of the franchising model used widely today.  Beginning with a small burger stand in 1954, founder Ray Kroc pioneered many innovations, not least the idea that a burger sold on the east coast of America should be identical in price, taste and appearance as one ordered on the west coast.
  • Franchising rescued another fast-food giant, Kentucky Fried Chicken. When  the construction of a new highway threatened to reroute much of the passing trade of a prosperous  chicken restaurant and motel in Kentucky,  its founder took the apparently strange decision to sell his properties and downgrade to a travelling salesman. Traversing the US selling his recipe and format to restaurant owners for a return of five cents per chicken piece sold, Harlin Sanders was ultimately vindicated as no fewer than 600 outlets bought into his idea. In 1964, ‘the colonel’ sold the chain for $2m, meaning that ‘downgrade’ to travelling salesman was pretty lucrative.
  • J Lyons & Co was the first company to adopt the franchising model in the UK, buying the rights to the Wimpy burger restaurant brand from American Eddie Gold and opening the first outlet in London in 1954.
  • The franchising concept was tarnished through its perceived association with the numerous pyramid selling schemes exposed in the late 70s. The founding in 1977 of the British Franchise Association, which awards accreditation to franchises which adhere to minimum standards, helped restore public faith and franchise opportunities continued to proliferate during the 80s. 
  • China has more franchises than any other country, but each franchise has an average of just 43 outlets, compared to more than 540 in the US.

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