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The earliest signs of franchising in the United States dates back to
the 1850's just after Isaac Singer invented the Singer Sewing
Machine. During his search for an effective and affordable way to
distribute his product for his company, the Singer Sewing Centre,
Singer ran into problems that prevented his company from becoming
successful.
His first problem was a lack of capital for manufacturing his
machines. Secondly, no one was willing to buy his sewing machines
without first being taught how to use them, which required effort
that most traditional retailers could not provide. Singer's solution
was to charge licensing fees to business people who would own the
rights to sell his machines in certain geographical areas. They
would also be responsible for teaching consumers how to use his
machines, thereby creating sales opportunities. Using the licensing
fees to fund manufacturing, he was then able to afford to build his
machines and then ship them directly to his newly formed
distribution network. |
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Singer's idea got noticed; and over the next several decades, many
other companies began to copy and enhance his business model. At
first, companies like Coca-Cola introduced franchising into their
bottling and manufacturing areas in order to reduce financial risk.
Later, companies such as McDonald's and Burger King took
franchising to a whole new level by creating some of the largest
franchise networks in the world. Today, there are thousands of
successful franchise companies with outstanding business models that
provide products and services to consumers and businesses all around
the world! |
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