Franchising is a business arrangement in which an established company, the franchisor, licenses its brand, operating methods and intellectual property to an independent operator, the franchisee, in exchange for fees and adherence to defined standards. It lets a business expand rapidly using the capital and labor of independent owner-operators rather than the franchisor's own funds. Modern franchising became a dominant American retail and restaurant expansion strategy after World War Two. This description is adapted from Wikipedia contributors under CC BY-SA 4.0; changes were made. https://creativecommons.org/licenses/by-sa/4.0/
Facts
Core MechanismThe franchisor licenses its know-how, procedures, intellectual property and the right to sell its branded products or services to the franchisee, who pays fees and agrees to comply with operating standards in return. 1 Origin YearPemberton's 1886 licensing of Coca-Cola syrup is the article's clearest early successful franchise; the Singer Sewing Machine Company's 1850s program is noted as an earlier, ultimately unsuccessful attempt. Connections
Associated With
The Coca-Cola bottling arrangement the source names as one of the earliest and most successful franchising operations in the United States began as a beverage maker licensing others to bottle and sell its drink, a food and beverage industry origin for the practice.
Source Wikipedia, Franchising
Franchising is defined by its own source article as involving the licensing of intellectual property and business-format knowhow, making it a specific commercial application of the licensing model rather than an unrelated concept.
Source Wikipedia, Franchising
McDonald's, built into a national and international chain after Ray Kroc's 1955 franchise agreement with the McDonald brothers, is business literature's single most commonly cited example of franchising.
Source Wikipedia, McDonald's Corporation
Microfranchising is a small-scale, low-capital variant of the franchising model aimed at developing-economy entrepreneurs.
Ray Kroc built McDonalds into a global chain by turning it into a franchise operation, the defining example of the franchising model in the fast-food industry.
Source Wikipedia, Ray Kroc
A large share of chain restaurants operate through the franchising business model.
Source Wikipedia, Restaurant
Sources
1. Wikipedia, Franchising
WikipediaLead and History sections
The boom in franchising did not take place until after World War II
Lead section
Franchising is a business practice where a company licenses its business model to another company.
Regulation section
business format franchises
History section
In 1886, he concocted a beverage comprising sugar, molasses, spices, and cocaine. Pemberton licensed selected people to bottle and sell the drink, which was an early version of what is now known as Coca-Cola. His was one of the earliest and most successful franchising operations in the United States.
View the Source Wikipedia, McDonald's Corporation
WikipediaAssociated With: McDonald's Corporation, lead sectionView the Source Wikipedia, Restaurant
WikipediaAssociated With: Restaurant Industry, Economics - Canada sectionQuote, Associated With: Restaurant Industry, Economics - Canada section
Chain restaurants account for the remaining 37%, and many of these are locally owned and operated franchises.
Wikipedia, Ray Kroc
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