The act of franchising predates the word as recognized by the public today.
If we look to the “Online Etymology Dictionary,” we can trace the origin of Franchise (Noun) – c.1300 franchise, “a special right or privilege (by grant of a sovereign or government);” also “national sovereignty; nobility of character, generosity; the king’s authority; the collective rights claimed by a people or town or religious institution,” also used of the state of Adam and Eve before the Fall, from Old French franchise “freedom, exemption; right, privilege”
Franchise (verb) late 14c., “to make free,” from Old French franchiss-, past participle stem of franchir “to free” (12c.), from franc “free” (see frank (adj.)). Franchising is from 1570s; the commercial licensing sense is from 1966. Related: Franchisee; franchiser; franchisor.
The origins of franchising as a business practice can be traced back to 200 B.C.
The origins of Franchising as a business practice can be traced back to 200 B.C. to a Chinese retail shop owner names Lo Kass. Let’s look at a brief history timeline to see the history of Franchising.
China 200 B. C.
Loydd Tarbutton, in his book; Franchising – The how-to book, suggests the first chain store concept started by a Chinese man named Lo Kass back in 200 B.C. Lo Kass operated several retail units in China.
The Middle Ages
Back in the Middle Ages, back when Manorial courts; A feudal law through which Lords exercised jurisdiction over tenants, made Franchise-like agreements with tax collectors. The tax collectors would retain a portion of their collections in return for collecting tax dollars. These collections were made in the name of the Lords who governed the land
The Colonial Period
During the Colonial period, landowners would authorize individuals to run markets and perform business activities such as run local ferries for a certain fee. European monarchs would allow individuals expand colonies and operate those lands under the protection of the Crown in exchange for taxes and royalties.
The 19th Century
Pub owners where offered support to maintain the upkeep of their establishments back in the early 1800’s in exchange for allowing brewers to exclusively sell their brand. In the mid-1800’s the first American Franchise was established by Albert Singer and his Singer sewing machine. Singer is highly regarded for his licensing arrangements. Singer set up specific geographical locations for business owners and charged an upfront licensing fee for the right to sell his sewing machines.
The 20th Century
In the 1950’s and 60’s Franchising as a marketing strategy really started to take off. This is especially prevalent in the fast food chains. With the expansion of Interstate Highways fast food chains, McDonald’s and Kentucky Fried Chicken had begun expanding into two of the most successful Franchises today.