Today, franchising represents one of the most successful business models in the USA. Many different types of businesses seek to promote goods and services using this flexible structure. From a cell phone repair franchise to a franchise selling consumer products, numerous entrepreneurs rely upon this form of organization to successfully penetrate regional and national markets. This brief article offers a quick overview of the history of franchising in the United States.

An Ancient Term

Although modern franchises rely upon a fairly recent organizational structure, the word “franchise” possesses deep roots in the past. For generations, the term referred to a unique right to exploit profits. For example, in England during the Medieval Period, feudal lords sometimes granted special taxation or money-collecting privileges to franchise holders.

Cultivating Mass Markets

Yet the roots of commercial franchises did not really begin developing until the mid-1800s in the United States. Some historians contend the Singer Manufacturing Company originally founded by inventor Isaac Merritt Singer and attorney Edward Clark developed one of the earliest practical franchised business models. They note the firm became one of the first enterprises to sell its products to a mass market. The company allowed entrepreneurs to purchase Singer sewing machines for business purposes using creative rent-to-own plans. While not actual franchise agreements, the contracts enabled some proprietors to establish their own small businesses using new technology.

A 1950s Business Model

Modern franchises gained wide popularity for the first time in the United States during the 1950s. The creation of “fast food” restaurants spurred the growth of this form of business. With lax regulation, the franchise market developed a poor reputation during the 1960s and early 1970s. Eventually, the advent of more stringent regulations subsequently enabled franchises to thrive as commercial structures.

A Modern Success Story

By the turn of the Twenty-First Century, franchising had become a highly popular, prestigious option. Today, numerous companies embrace this business model in the United States (and around the globe). Franchising permits successful entrepreneurs to reproduce their proprietary products and business systems on a much wider scale. It also supplies a “safety net” of sorts for many new businesses. By 2001, more than 760,000 unique franchises existed, according to The International Franchise Association. This business model has achieved acceptance in many nations (including the United States). Franchising has become well established and tightly regulated today.