The progress of franchising Released by: Franchise Direct Web Site: http://www.franchisedirect.com Franchising has been around for many years and centuries in one form or another, but it is recently Email: eamonn@franchisedirect.com Keywords: Franchise, franchises, franchise opportunities, international franchises. Update Date: 5/12/2006 7:04:00 AM Hits: 321 Descrption:  Franchising has been around for many years and centuries in one form or another, but it is recently that it has really taken off with the development of business format franchising. The term franchise is derived from old French and means privilege and freedom. In the Middle Ages a ruler of a country or a lord would enable individuals and groups of people to hold events or markets on his/her land. This idea branched out across the developed world to a range of company activities such as building roads and sewerage systems. It was the mid 1800s to early 1900s where the first signs of firms allowing other outlets to sell its products appeared. The first companies to be accredited with this development were German ale firms in the 1840s and US-based Singer Sewing Machine Company. Local companies would take some of the profits and use their contacts to promote the manufacturer's goods to a regional audience. In return, the major firm would obtain money by marking up products, property rents and interest payments on any loans needed by the local company. However, an increase in the population after the Second World War and the rapid expansion of fast food outlets and leisure services largely enabled the growth of business format franchising. Many people wanted to own their own business and companies in a range of established and new sectors were looking to increase buildings and outlets in as many places as they could and so a model was developed and refined which forms the main franchising method in operation today. Individuals, known as franchisees, invest their money into a company and the firm, the franchiser, provides its business look and structure along with training and support services. The franchisee gets the advantage of an established brand name and less risk of failure while the franchiser is able to have a new outlet without a significant expenditure. However, there was initially a problem with this structure in the 1960s and 70s as people set up fraudulent companies and ran off with people's money and other firms poorly managed franchising and went bankrupt. Therefore, in the US and then elsewhere in the 1970s and 1980s, regulations were made and national associations (along with US-based the International Franchise Association) were established, where firms have to follow a set of principles to be accredited by them. Over the last 20 years, franchising has grown in many countries worldwide as the practice has become global as well as domestic. For a number of years now, more than $1 trillion in goods and services are sold through franchises in the United States each year. In addition, the annual turnover for the British franchising industry broke the £10 billion mark (£10.3 billion) for the first time in 2005, according to the recently published survey by NatWest and the British Franchise Association. Copyright Adfero Ltd 2006 http://www.franchisedirect.com Contact infomation: Unit 106, Capel Building, Capel street, Dublin 7, County Dublin, Ireland.