International Franchising

2661 Words11 Pages
Abstract This paper is concerned with evaluating the structure, history, cultural aspects, leading businesses, and the future of international franchising. Franchising has become an increasingly popular market-entry mode, and the use of franchise systems for expansion into international markets is expected to continue and perhaps intensify. (Arthur Anderson, 1996) These business franchises appear as hotel chains, fast food restaurants, and many others. The first section examines the definition of franchising by giving an overview of franchising from an international perspective. The historical section traces this form of business ownership from its beginnings in the Middle Ages to the current trend in international expansion. The…show more content…
Over the course of time, the regulations governing franchises became a part of European Common Law. Throughout the centuries the franchising concept has evolved as the economies of the nations of the world have evolved. During the early 1800s in Germany, certain major ale brewers granted franchises to certain taverns, giving those taverns the exclusive right to sell their ale. This marked the beginning of the concept of franchising as we know it today. In 1851, the Singer Sewing Company became the forerunners of modern franchising agreements through the contracts that it would associate with its franchising activities. In the 1880s, cities began to grant monopoly franchises to street car companies and utilities for water, sewerage, gas, and later, electricity. Another stage in the evolution of franchising came around the turn of the 20th century when oil refinery companies and the automobile manufacturers began to grant the right to sell their products. Business format franchising, which is the dominant mode of franchising today, came onto the economic scene after World War II with the return of the millions of U.S. servicemen and women causing the subsequent baby boom. Franchising became the ideal business model for the rapid expansion of the hotel/motel and fast food industries. International franchising started its beginnings in the early 1960 's. However, the explosion of the 1960s and 70s saw many forms of abuse in the
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