Isaac Singer, who founded the famous Singer Company in New Jersey, was the first person to have introduced a franchising arrangement to the world as we know it. He used to set the guidelines for the terms and condition which were based on an agreement, which was converted into a contract after ratification by both sides. While he was successful at his business of sewing machines, however he also needed people in different territories where he was selling his sewing machines for supply of spare parts and for servicing and repairing the machines locally, since the cost of providing such services from the headquarters were quite high. He therefore introduced a franchising system in which he used to outsource all such services to the local people and this business model became so successful that has been copied multiple times across the world including the United States of America where this model was copied numerous times by different corporate.

Learn about usa franchise

The next industry to copy this model in the United States was the motor industry. General Motors is the best example here, which quickly sold franchises and managed to expand their market and services to different cities and a low cost. Franchises were demarcated on the basis of exclusive territorial control, and they were rewarded on the basis of how well they do their business. The growth of the General Motor franchise in the form of a massive dealership network inspired other motor car manufacturers to adopt the franchising model which was quite similar to that of GM itself.

With the success of the franchising model within different industries, the fast food industry was the next to adopt the franchise model, and today, fast food franchises are one of the most famous examples of this successful business method. McDonalds managed to expand itself worldwide and became the largest fast food company worldwide. This model was so successful, that now you can purchase and eat a Big Mac in nearly every part of the world. Many American companies followed McDonalds, with KFC, Pizza Hut and Wimpy also following suit. The franchise model allowed all these companies to reach out to new markets and destinations, and diversified their products according to the customer base.

The spread of the American brands through franchising introduced this model to other parts of the world, where it was replicated quickly by different local companies and they also were able to quickly expand their businesses while maintaining low costs. In the USA today, the International Franchise Association is the foremost regulatory authority and works in close liaison with the Federal Trade Commission, and they aim to protect the rights of the consumers.