MIE258H1 Lecture : 03Franchise12.pdf
20 Nov 2012
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Contrary to popular belief, franchising was not invented in america in 1500"s in britain, the church paid a lump sum to the government for the right to collect taxes. Next came the tied-house agreements between brewers and pubs in the 1700"s, in practice still. In the u. s. singer sewing machine company became the first franchise in 1866. Modern day franchising started out as an exclusive licensing process by auto manufacturers to their distributors about 100 years ago. 1920"s soft drink producers realised that shipping water far was very expensive, so local franchising was started. The auto companies" reasons: the large capital required to set up national distribution networks was not available. An estimated 1,500 different franchisors operate in the u. s. It is believed that more than 750,000 franchise businesses are in the u. s. The industry and businesses employ over 18 million people in the u. s. In 2004, it is estimated that franchises did 1. 5 trillion in economic output.
