The United States is a leader in franchising, a position it has held since the 1930s when it used the approach for fast-food restaurants, food inns and, slightly later, motels at the time of the Great Depression.As of 2005, there were 909,253 established franchised businesses, generating 0.9 billion of output and accounting for 8.1 percent of all private, non-farm jobs.Franchising is based on a marketing concept which can be adopted by an organization as a strategy for business expansion.Where implemented, a franchisor licenses its know-how, procedures, intellectual property, use of its business model, brand, and rights to sell its branded products and services to a franchisee.(Even Colonel Sanders did not initially succeed in his Kentucky Fried Chicken franchising efforts.) Still, the Singer venture did not put an end to franchising.Other companies tried franchising in one form or another after the Singer experience.Although many business owners did affiliate with cooperative ventures of one type or another, there was little growth in franchising until the early 20th century, and in whatever form franchising existed, it looked nothing like what it is today.As the United States shifted from an agricultural to an industrial economy, manufacturers licensed individuals to sell automobiles, trucks, gasoline, beverages, and a variety of other products.
However, there were serious pitfalls for investors, which almost ended the practice before it became truly popular.This amounts to 11 million jobs, and 4.4 percent of all private sector output.Mid-sized franchises like restaurants, gasoline stations and trucking stations involve substantial investment and require all the attention of a businessperson.Thirty-six countries have laws that explicitly regulate franchising, with the majority of all other countries having laws which have a direct or indirect effect on franchising.The boom in franchising did not take place until after World War II.
In return the franchisee pays certain fees and agrees to comply with certain obligations, typically set out in a Franchise Agreement.