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The brief history
of franchising
There
is evidence that Franchising began in England in the Middle Ages,
when the Monarch granted licenses to his Barons, Knights and Lords
of Manor to exploit the land under their control.
More
recently a form of franchise known to most of us is that of the
trade with Public Houses on a tenancy basis.
The
USA in the 60's and 70's showed a rapid growth of franchising.
At least one third of all retail sales was carried out via the
franchising method with nearly 2,000 companies offering franchise
opportunities.
Since
then there has been commitment to the Franchise concept by many
major companies who had previously been engaged in the more traditional
business formats.
There
is also strong evidence of increasing interest in the UK market
by overseas franchisors.
Franchising
is big business -
The number of franchise outlets leapt 17 per cent to 35,600 in 2000
according to the latest annual NatWest British Franchise Association
Survey.
There are now 665 different businesses operating as franchises with
a total annualised sales recorded by franchised businesses of
£9.3 billion last year.
Franchising is successful - ask the banks, National Westminster,
Barclays and The Royal Bank of Scotland alone have provided hundreds
of millions of pounds. Banks support Franchising because it works
- Franchisor and Franchisee failure rates are stunningly low compared
to normal business where the failure rate is commonly quoted at
80% plus.
Franchisee failure rate is under 5.3%.
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