The History of the American Franchise Entrepreneur

America has long been seen as the Land of Opportunity. That was true from the time of the Pilgrim fathers and the founding of the United States.
After religious freedom, the biggest draw in America was the chance to own land. This immediately opened up a wide range of business opportunities for citizens in this new country.

Early Business Opportunities

Most of the country was rural, with very little in the way of urban centers. People had to make their own furnishings, household goods and clothing. Running a farm meant plows, horse gear and other farm implements. No one could head on down to Lowe’s to buy it, load up the pickup and take it home.

It all had to be handmade. This left the door wide open for individuals to pick their own business opportunities. Anyone with a trade or artisans with specific skills could set up their own business. With a certain amount of savvy and marketing skills, they could make a good living.

Here is just a partial list of how they could seek financial freedom:

  • Farmer
  • Trader of horses, cattle, sheep or other type of livestock
  • Seller of notions, clothes and kitchen gadgets, going from farm to farm
  • Opening a store in a small town
  • Owning a smithy to shoe horses
  • Owning a livery stable in town for feeding, watering and renting animals
  • Hauling and mail delivery
  • Candlemaker
  • Shoe maker
  • Barrel maker
  • Gunsmith
  • Wagon and wheel maker
  • Miller
  • Owner of a tavern
  • Stage coach transfer center

Every business in early American was a small business and this is just a fraction of the options open to early American entrepreneurs. Then as now, services and products were limited strictly by imagination and financial wherewithal to make it happen.

The Long History of Franchising

Even in Colonial America and in the early days of the republic, franchising had its place. But its history goes back several centuries. In the Middle Ages in Europe, officials would give the privilege of running markets in certain cities to individuals or groups.

The same was true of big fairs and running ferries across rivers and lakes. This extended to the royal license to brew beer, build roads and construct churches. These are the earliest forms of franchising.

By the 1840s in Germany, makers of popular ales granted the right to market it to individual taverns. In this country peddlers traveling from farm to farm and hamlet to military outpost to small town all over the countryside were early franchisees. They were granted exclusive territories by the makers of their goods.

But the practice took the form that people recognize today after Isaac Singer invented the modern sewing machine in 1851. He was having trouble getting enough people buy it. He came up with two ideas to help:

  • He allowed people to pay over a period of time.
  • He assigning territories to salespeople because the geographic area of the country was so large.

He is credited with the first franchise contract and he is referred to as the first franchisor. It worked well for him. He was able to leave over $13 million to his 13 children when he died in 1875.

Franchises Covering the Country

Over the ensuing decades, other companies used the franchising model as a way to efficiently sell their goods over a wide swath of territory like the United States. For example, utility companies and streetcar and trolley makers assigned rights to specific cities. Automobile makers and oil refineries did the same.

With the popularity and affordability of the horseless carriage, America took to the road. This increased the use of franchising. For example, Dunkin Donuts appeared in 1950, Burger King four years later and McDonalds a year after that. Small hotel chains popped up along statewide routes.

Business opportunities have abounded in this country since its founding. Individuals seeking a dream of financial freedom have helped the U.S. thrive. Here’s to the Fourth of July, the freedom that comes with the Constitution and the Bill of Rights and the freedom that comes with owning your own business.