According to definition, the word "franchise" comes from old French, meaning privilege or freedom. Some say franchising began with an effort to collect taxes, as governments would select certain people to gather fees within a given geographical area. These "collectors" as they were called, kept a sizeable portion of the monies collected and remit the balance to the Pope. Other historians say franchising started with a privilege bestowed by the local sovereign -- or lord - giving merchants the right to hold fairs, market their wares, trade, run local ferries or hunt on their lands. Essentially, this was an endorsement of a monopoly on commercial ventures. This common practice was perpetuated throughout the Middle Ages, and eventually became part of European Common Law.

Franchising continued its evolution in the economies of the world. The most sited example occurred in Germany in the 1840's when major ale brewers granted exclusive rights to certain taverns to sell their brew. In 1851, the Singer sewing machine company granted limited distributorships for their famous sewing machines. The language, format and contractual agreements utilized in that early franchise document (i.e., Prospectus or United Offering Circular) are still utilized today.

Around the turn of the century, the face of franchising looked very much the same; it essentially granted the right to distribute and sell a product. At this time, the trend-setting model was the franchising rights authored by oil refineries and automobile companies.

After WWII, millions of servicemen and women returned home, and with that - the Baby Boom began. The large work force demanded the opportunity to explore and develop more and better business opportunities, which changed the business and our economy forever. With these demands, franchising evolved into the dominant and most successful concept - business format franchising. In this type of franchising, the franchisor (example: McDonald's) not only allows the franchise to use its name and sell its products or services, but also involves the total transfer of a way of doing business. This includes marketing, operating, technical training, management techniques and expertise developed and perfected by the franchisor (sometimes referred to as a "learning curve"). The franchisor will also provide on-going training and support throughout the life of the franchise agreement.

A rapid growth in the 60's and 70's presented a perfect opportunity for the "franchise concept" to grow and flourish. At the same time however, franchising experienced some harsh growing pains. Along with the honest and solid franchisors, emerged the unscrupulous and fraudulent; misappropriating the licensing fees and literally running out of town. Others were undercapitalized and faltered in their concept, leaving in their wake--- the franchisees. Still, other franchisors had been careless in selecting the right "franchise" and thus, partnered themselves with erroneous individuals and misrepresented their company.

In spite of all of the hardships and stumbling blocks, franchising has emerged triumphant, as it remains as the most clear and viable business concept. Franchising, or more specifically, business format franchising, affords entrepreneurs interested in self-employment a strategic partnership or relationship that is governed by a contract or franchise agreement for a defined period of time. When you purchase a franchise you are investing a proven and refined system that should have a brand name, successful operating system and a history of quality service and success. The common goal for the franchisor and the franchisee is to dominate a particular market and keep customers coming back for more. All members (franchisees) of a particular franchise system share the responsibility of maintaining high standards of quality, consistency, convenience and other factors that contribute to the success of building a dominant brand, loyal customers and repeat business for everyone.

The ultimate success of the franchisee (individual franchise unit owner) is based on the proven success of the franchisor. If the franchisor offers an established product or service with a well-recognized brand name, a history of success with company units and existing franchises, is well financed and motivated, your chances of success are very high. And, although franchising is now a very highly regulated industry, it is important that you ask the right questions, seek the right advice and consider your objectives before investing in any franchise opportunity.

The history of franchising is like any other - with turns, twists, hills and valleys. But observe any busy street corner to understand the power, value and foot hold that franchising has accomplished. It is a highly regarded and regulated industry, which encourages the creation of business opportunities with guidelines, procedures and advice.