Franchising is one of the most lucrative industries in the world. The industry is worth 800 billion annually in the US, with over 800,000 franchise units. The sector employs 8 million people with just under 4,000 different franchisors. If you want to learn more about this exciting industry, you have come to the right place. This article talks about the basics and the history of franchising.
“There’s no guaranteed success in life and in business, but franchising can minimize the risk element as much as possible.” – Rakesh Sharma
What is franchising?
Franchising is a form of marketing and distribution in which the franchisor, the brand owner, grants the franchisee the rights to run their own local business, using the franchisor’s product, service, system, and proven umbrella of success.
History of franchising
Franchising originated in the 1850s when Isaac Singer, inventor of Singer’s sewing machine, couldn’t expand his business because no one knew how to use it, and he did not have enough money to mass-produce no sewing machines.
He came up with the idea of franchising, where he sold the rights to manufacture his machines and taught each franchisee how to use them. His business took off, and Singer is now one of the world’s most renowned brands.
Mcdonald’s is also a perfect example of a successful franchise that copied Singer’s business model. They currently have 14,000 restaurants all over the world.
Success in Franchising
Contrary to popular belief, franchising does not guarantee success. Franchising can only minimize the risk elements of starting a new business, and it still needs a lot of hard work and commitment from the owner.
Like any business, thorough research of the industry and competition is still necessary before investing money in a franchise.
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