The History of Franchising

May 2, 2008 | By

What is the history of franchising?
The word “franchise” comes from old French, meaning privilege or freedom. In an effort to collect taxes, governments would select certain people to gather fees within a given geographical area. These “collectors” kept a portion of the payments they collected and then remitted the balance to the Pope. Others say franchising began when the local sovereign bestowed the privilege to hold fairs and trade freely. Basically, this was an endorsement of a monopoly on commercial ventures. This practice took place throughout the Middle Ages and eventually became part of European Common Law. Franchising continued to develop throughout history.

In the 1840’s, German ale brewers granted exclusive rights to certain taverns to sell their brew. Then, in 1851, the Singer sewing machine company granted limited distributorships for their famous sewing machines. The format, language, and contractual agreements from the Singer sewing machine company’s first distributorships are still used as a model for franchising documents today!

 

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