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The history of franchising demonstrates how a licensing model that dates back to the Middle Ages has evolved into a fundamental aspect of modern business. This article explores significant moments, essential practices, and influential figures that have shaped franchising over the centuries. Discover how this business model originated, transformed, and continues to thrive today.

Franchise agreement

The evolution of the franchise concept from a legal term to a sophisticated business model reflects its adaptability, notably influenced by figures like Benjamin Franklin and Isaac Singer during the Colonial Period and the Industrial Revolution. The post-WWII era marked a franchising boom, characterized by increased establishments, regulatory measures for franchisee protection, and the growth of business format franchising, which continues to thrive and evolve in the modern economy.

The story of franchising begins in the Middle Ages, a time when local governments sought innovative ways to maintain order and collect taxes. They granted licenses to noblemen and high church officials to manage territories and enforce laws. These arrangements helped maintain societal structure and economic stability. Landowners were responsible for raising livestock, collecting taxes, and establishing toll roads in exchange for these privileges.

This system provided business opportunities and offered citizens protection and the ability to conduct certain businesses. The tavern system, where tavern owners allowed others to operate under their brand for a share of the profits, is one early example of this practice. Over time, the meaning evolved, influenced by Old French and English, to encompass the business practices we recognize today.

The evolution of franchising terminology reveals the historical depth and adaptability of the franchise concept. The Colonial Period and the innovative efforts of Benjamin Franklin provide key insights into how franchising began to take shape in the New World. During the colonial period, European monarchs granted franchises for various commercial activities, marking the beginnings of franchising in the New World.