Franchising in America: The Development of a Business Method, 1840-1980

Franchising in America: The Development of a Business Method, 1840-1980

Franchising in America: The Development of a Business Method, 1840-1980

Franchising in America: The Development of a Business Method, 1840-1980

Synopsis

Using a series of case studies from five industries, Dicke analyzes franchising, a marketing system that combines large and small firms into a single administrative unit, strengthening both in the process. He studies the franchise industry from the 1840s to the 1980s, closely examining the rights and obligations of both the parent company and the franchise owner.
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Excerpt

Franchising became a highly visible institution in the United States during the last half of the twentieth century. At the start of the 1950s franchising was already a considerable and well-entrenched force in the economy. It had dominated such key sectors as automobile sales and gasoline retailing from their earliest years and was well established in lesser industries such as soft drinks and fast food. By the end of the 1960s it was used to sell virtually every type of good or service imaginable, and the franchise outlet had become a ubiquitous feature of the American landscape. Currently, over one-half million individual franchised businesses are scattered across the United States. Together, they account for well over one-third of the total value of all retail sales in the country. That proportion is expected to grow significantly in years to come. The main purpose of this study is to trace the development of the franchise system and explain why it has been possible for franchising to spread so quickly and weave itself so inextricably into the American economy.

The term franchise has a long history and a number of meanings. This has caused some confusion among the few authors who have touched on the origins of the system, so the word itself deserves some explanation. Originating from an Old French term meaning "to make or set free" or "to invest with a franchise or privilege," it was used in business at least as far back as the Middle Ages, when franchise referred to government grants of special rights given in exchange for some service, such as tax collection or road construction, that the state subcontracted to private individuals. In the nineteenth and twentieth centuries the term has, until recently, been associated most frequently with grants of incorporation . . .

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