Franchising: A History Lesson by Franchise Creator

Franchising is considered one of the most successful business models in the world, thanks to its efficiency. It’s the reason why concepts like McDonald’s, Subway, 7-Eleven, and Planet Fitness surged into prominence and became titans of their respective industries. However, with so many franchised businesses in existence, one must ask: “When did franchising begin?” The answer to that isn’t clearly defined, but historians have traced the practice of franchising back to the Middle Ages!


Franchising Before The 1800s

It’s hard to believe, but franchising became a concept for the economy back in the Middle Ages! During the times when kings and queens ruled their domains, it was quite common for local governments to permit church officials and other high-ranking individuals the right to maintain order and carry out tax processes. High courts and Lords also licensed out the ability for others to operate markets, tolls, and other economical activities. The licensees paid a fee to the owners in exchange for the right to operate these ventures, as well as protection from thieves and vandals. This method of franchising was practiced until it became a part of common European law.


Sewing Together New Solutions (19th Century)

If you’re savvy with fashion and fabrics, then the name Isaac Singer should ring a bell. Mr. Singer was responsible for designing the first sewing machine intended for home use. In the early 1950s, Singer sought a larger method of distribution to get his machines into homes, but lacked the capital to increase production. It didn’t help that consumers did not want to invest in the product without proper training, which was not provided by retail stores at the time. Despite the obstacles that Singer turned to franchising. By selling licenses to entrepreneurs, giving them the right to sell his machines in addition to training consumers on how to use them, he was able to amplify his production without using the majority of his resources. Singer’s success in franchising his concept proved that it was one of the smartest ways to grow businesses and the economy – specifically after the Baby Boom when the rise in population demanded a rise in goods and services.


Modern Franchising (20th Century)

In the first half of the century, franchising was slowly growing as a reputable business tactic, but it wasn’t the immense force it is today if not for a particular entrepreneur. That credit goes to Ray Kroc, a milk-shake equipment salesman who in 1954, found a unique burger spot called McDonald’s, based in San Bernardino. He was amazed by the highly-efficient business model of the restaurant, which allowed them to produce high volumes of orders with consistent quality minimal overhead. Kroc urged the owners to build their wealth by franchising the restaurant; he learned they tried but couldn’t get franchisees to uphold operating standards. Realizing their mistake selling to wealthy investors who never made the effort to oversee their franchise, Kroc became a licensing agent and began seeking middle-class franchisees who had greater reason to be invested in their business. From there, McDonald’s franchise locations began popping up all over the nation. Kroc became senior chairman of McDonald’s in 1961 by buying out the original owners’ interest, eventually opening the 10,000th McDonald’s location by 1988. Today there are more than 38,000 McDonald’s locations in the world!


The Future of Franchising (21st Century)

Today, franchises are all around us even though we’re not aware of it! From fast food restaurants to fitness centers to retail stores, franchising has given an abundance of opportunities to entrepreneurs seeking to go into business for themselves. In 2005, Hossein Kasmai, an astute entrepreneur, founded Guard-A-Kid, a child safety ID system. He franchised his concept and in five years, Guard-A-Kid expanded to over 150 locations in 11 countries. This inspired Hossein to launch Franchise Creator, a franchise consulting based in Miami, FL, to empower entrepreneurs to grow their businesses through franchise strategies. In less than a decade, Hossein and his team developed over 400 concepts across a diverse range of industries into successful franchises, including a children’s hospital, a mobile oil changing service, and a hair-product vending machine! In the last decade, Franchise Creator has accrued so much success, Hossein franchised Franchise Creator to expand into Los Angeles, Boston, and Saudi Arabia!


Combo Kitchen: The Next Big Thing in Franchising

In 2020, the world was paralyzed by the coronavirus pandemic. It brought the economy to a halt, and essential businesses were mandated to operate under social distancing restrictions. According to Yelp, this resulted in the permanent shutdowns of 55% of its businesses. That’s when Hossein recognized the growing trend of ghost kitchens and third-party delivery app, inspiring him to design Combo Kitchen: the world’s first ghost kitchen franchise. Combo Kitchen allows franchisees to build out a ghost kitchen and incorporate up to four proven concept in one location. Without the need for a dining area, building out and operating a Combo Kitchen is substantially more cost-effective and quicker than a traditional restaurant.


Where Will Franchising Go from Now?

It all depends on you! If you’re interested in franchising your existing business, investing to franchise a proven business, or break ground with Combo Kitchen, contact Franchise Creator today!

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