Brief History

Brief History


Franchising concept comes from the English word franchise, which is entered from French and means "privilege of a sovereign person or group of people." As a form of business relationship franchising has a long history. Business connections close to franchising build in XVI. century in Japan within the system Norenkai, according to which each former employee who organizes a business is required to pay part of the profits of his former employer. In XVIII century. Licensing trade alcohol stimulates the emergence of franchising in business relationships between brewers and owners of pubs in England and Germany. The interest of the producers is to secure guaranteed sales, and the owners of pubs - to get credit to cover the high license fees.


At the end of the XIX century. Franchising concept applied by the creator of Coca - Cola John Pemberton, which provides a large number of individual small businesses produce a drink with him transmitted by raw material as well as bottling and distribution and the right to use the trademark of main producer. Begin to apply franchise systems and companies "General Motors" (1898) and "Reksol" (1902) This kind of franchise or franchise so-called first generation refers only to certain products and largely covers in nature and economic purpose with modern distribution activity with the presentation of the distributor exclusive rights to sell a pre-determined area.

Recent history of franchising began in the middle of last century when the seller of machines for milkshakes Ray Kroc visited the restaurant, run by brothers Mac and Dick McDonald in California. He sees the crowded parking lot of customers waiting for delicious fried potatoes,and decided to buy the rights to use their system of sales and company name and so marked the beginning of a prosperous business.

In the 60 - year franchise quickly enters Europe mainly in the sectors of hospitality (ex hotel chains "Hilton", "Sheraton", "Holiday Inn", etc.), Restaurants, trade cosmetics, clothing, shoes, and in making certain services - dry cleaning, providing car rental and more. Main economic reason for the steady growth of franchising systems is increasing production capacity and growing competition between manufacturers of certain types of goods and services between businesses, as crucial to market acquires not the volume of supply and the intensity of demand from users.

Buy a franchise - proved the least risky way to start a business. Read more