Ideas for Business Success: What is Franchising?

What is franchising? The word “franchising” is etymologically descended from the 14^th century Anglo-French word, “franchir,” which means “to set free.” One could therefore speculate that the franchising business model is based on a “setting free” or “liberation” of sorts.

Strictly speaking, the correct response to the question, “What is franchising?” is that it is a business model by which an individual gains the right to market the products or services of a given company for a specified period of time in a specified place.

Franchising has existed for a long time. Some say that franchising goes back to America in the mid-19^th century, when Albert Singer founded the Singer Sewing Machine Company. Singer would distribute his company’s sewing machines to customers far and wide and train them to use them. He would also sell entrepreneurs licenses that gave them the right to distribute the Singer sewing machines. However, there is evidence that franchising was practiced before that in Germany, among German brewers who conferred upon particular taverns the right to sale their ale.

Others trace the concept of franchising much further back in time, specifically to the Middle Ages. They view the practice by which leaders granted people the right to operate various commercial interests as a precursor of the present day practice of franchising. Perhaps a better example is that of the church and its expansion through Europe. Some might consider it offensive to describe the church as if it were a business, but there are certainly parallels to speak of. One might say that these parallels prove that successful ideas can be adapted to all sorts of situations.

 

Reconsidering the Question “What Is Franchising?”

 

However one chooses to answer the question, “What is franchising?” it is widely agreed that it is a popular business model. The success of franchising can be attributed to a number of factors that make it easy for entrepreneurs to get established in business. To begin with, franchising involves selling goods and services to a pre-existing market. Hence, one does not have to create a customer base from scratch. Also, with franchising, a successful business model has already been established, as has a brand name. Furthermore, the franchisor or originator of the franchise often invests in training the entrepreneurs to whom he or she sells the franchise. All of these factors save entrepreneurs time and resources.

So, in response to the question, “What is franchising?” one might respond that it is an innovative idea that has the proven capacity to “liberate” hardworking entrepreneurs and make successful businessmen out of them.