Archive for April, 2011
Introduction to Franchise Business
The concept of franchising as it is known today dates back to the 1840s in Germany, when major ale brewers gave the exclusive rights to sell their products to certain taverns. But the true guru of modern franchising is Isaac Singer, who in 1858 built the market for Singer sewing machines using franchising agreements similar to those found today.
Singer’s method of franchising, the product distribution method, was picked up by many manufacturers, including Coca-Cola, which expanded its product throughout the United States by shifting the burden of manufacturing, storing, and distributing its soda to local businesspeople through the process of selling them bottling rights. Car manufacturers found they could shift their distribution and selling costs to local businessmen who wanted to run car dealerships. Oil companies saw the light, too, and shifted their distribution and retail costs to local businessmen who ran convenience stores, gas stations, and car-repair shops.
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