Franchise Facts and History – All You Need to Know

Franchise Facts

Franchising is the perfect recipe for growth. Throughout history, every franchised operation has been fueled by the desire to expand. But franchised businesses are also the result of limited financial capital and the need to overcome great distances. Join us as we journey through the pages of history and learn about some of the most important franchise facts.

Top Franchise Statistics: Editor’s Choice

  • Isaac M. Singer is the Godfather of the modern franchising model.
  • McDonald’s is the world’s biggest franchise with more than 38,000 restaurants.
  • A 50% of stake in Domino’s Pizza was once traded for a used VW Beetle.
  • Anytime Fitness has a gym in Antarctica.
  • There are 38 million ways to make a Subway sandwich.

History of Franchising

When did franchising actually start? There are many different interpretations about what constituted the earliest form of franchised operations. Some say it was during the 19th century, and others trace its origins to 200 AD. But the correct answer is the Middle Ages.

Back then European monarchies allowed noblemen and the church to manage lands that belonged to the Crown. They were charged with protecting the territory and collecting taxes. The nobles granted local farmers the right to use a piece of land in exchange for royalties. This is considered the first franchise operation in history.

Fast forward a few centuries and the world was adding another continent to the map that quickly became a brand new venue for business expansion. In the 1850’s, Isaac M. Singer was in the business of making sewing machines. He had a brilliant product but lacked capital for mass production. He devised a business model in which he sold licensing fees to people that wanted to sell the machines and teach others how to use them. Thus, the oldest franchise in the US was born, and others soon followed. 

You might’ve heard about Coca-Cola. In 1886, John S. Pemberton invented the now famous beverage and wanted to expand his business. Just like Singer before him, Pemberton licensed his drink to a select group of sellers. Coca-Cola quickly became the biggest franchise in the world, at least when it comes to fizzy drinks.

The real boom for the franchising industry came during the baby boom era. World War II was over, the world was getting back on its feet, and people needed lots of new products and services. This gave rise to a string of new franchises throughout the 1950s and 1960s, including one that would eventually morph into the biggest fast food chain in the world – McDonald’s.

One of the more interesting McDonald’s franchise facts relates to how it evolved from a humble burger stall to a chain of restaurants. The person credited for this success wasn’t one of the McDonald brothers but Raymond Albert Croc. 

Before stumbling onto McDonald’s, Croc was selling milkshake mixers. One day, he learned that his regular customers, the McDonald brothers, managed to use eight of his machines at the same time like a conveyor belt. Coincidentally, the brothers were looking to turn their business into a franchise. It was a match made in heaven, and just a few years later, there were 500 restaurants across the United States. Today, about 80% of all McDonald’s locations are franchises.

macdonald's franchise smallbizgenius

The Biggest Franchises of Today

Franchising today is bigger than ever. Some of the most popular products and places are part of global franchises. You can pick almost any random product in a convenience store, and there’s a good chance that it was produced by a franchise. As a matter of fact, it’s highly likely that the very store you’re browsing through is another franchise. 

Among those are some truly astonishing franchises and brands. Some of them have tens of thousands of locations and are as old as the US itself. 

♦ McDonald’s is still the largest franchise in the world.

(Franchise Direct)

The world’s biggest franchising success story is more than 60 years old. McDonald’s now has more than 38,000 locations worldwide and employs nearly two million people. In an effort to meet the needs of customers, the food franchise is evolving by investing in tech. In 2019 alone, the company struck a $300 million acquisition deal with a personalization and decision logic technology firm. That was followed by the purchase of stakes in several companies that develop mobile apps, mobile payment systems, and even artificial intelligence.

♦ Subway has more locations than McDonald’s.

(Business Insider)

There are more than 41,000 Subway restaurants in the world. That means that the company opened, on average, two new restaurants every day since it was founded in 1965. The company also sells 7.6 million sandwiches every day.

♦ 7-Eleven owns more than 71,000 units.

(TBSeFM News)

McDonald’s might be the most popular franchise, but the top spot for the number of locations goes to the retail chain 7-Eleven. The company recently opened its 71,100th store, which is located in South Korea’s capital, Seoul. 7-Eleven has stores in 17 countries across the globe

♦ The Hertz Corporation operates in more countries than any other franchise. Its offices are located in 150 states across the globe.

(Franchise Direct)

Founded in Chicago in 1918, this car rental franchise is now present on all continents with more than 10,000 units. It was originally known as Rent-A-Car Inc. with a humble offering of just a dozen Model T Fords.

♦ By opening 516 properties throughout 2019, Marriott International retained its place at the top of the hotel industry.

(Franchise Direct)

One of the more important franchise facts about the hotel industry involves Marriott International. This hotelier spent the last seven years at the top of that industry. Throughout 2019, the company signed 815 hotel deals.  

♦ The Philadelphia Phillies are the oldest one-city, one-name sports franchises in the US.

(Wikipedia)

This professional baseball team was founded in 1883 and has been playing in the National League ever since. It has never changed its name or the city where it’s located, a very unique characteristic for a sports franchise.

♦ Anytime Fitness is the first franchise represented on seven continents.

(Franchise Direct)

It may not be considered the best franchise in the fitness industry, but Anytime Fitness has really gone somewhere nobody else dared to go. To Antarctica. Just because there’s too much ice, doesn’t mean the company’s growth has to stop. By opening a studio on the cruise ship Magellan Explorer, the franchise owners can say they have the coolest gym in the world.

♦ Out of the top 10 franchises today, only three aren’t food related.

(Franchise Direct)

The surest thing in the franchise business is a food and beverage franchise. People may not need to rent a car every day, but they’ll always need to eat.

Biggest Franchises of Today

Franchise fun facts

Every business has a story, and franchises are no different. Some of the more unusual stories come from businesses that became part of the franchising industry. And, like any business, a franchise will need to adapt to overcome hurdles along the way, more often than not influencing its competitors to do the same. From name changes and recipe changes to the most outlandish events in modern business, here are some statistics and very unusual facts about franchising.

  • There are more than 750,000 franchises in the United States alone.
  • Franchises in the US provide employment to more than 8 million people.
  • Of all franchise workers in the US, 50% are employed by quick service restaurants.
  • The McDonald’s golden arches logo isn’t the same everywhere. In Israel’s Tel Aviv, the traditional yellow and red logo was trumped by the blue and white of the Isareli flag to distinguish its kosher restaurants. In Sedona, Arizona, the arches are turquoise to blend in with the local landscape. And in Russia, both the name of the company and its products are written in Cyrilic. 
  • Not only is McDonald’s the largest franchise, it’s very versatile. This fast food franchise adapts its menu to the tastes of different countries. If you visit a McDonald’s restaurant in Japan, you’ll be able to find at least 50 items on the menu unique to this country. At one point, those restaurants offered black burgers that were supposedly delicious despite the unappetizing look.
  • The urban legend about Coca-Cola containing cocaine is real. The original formula that the company founder’s came up with contained two medicinal ingredients: coca leaf extract and kola nuts. It’s difficult to say how much cocaine was used in the formulation of the fizzy drink in the early days. After 1904, the company started using so-called spent leaves that only contain traces of cocaine. Coca-Cola eventually switched to cocaine-free coca leaf extract.   
  • A well known franchise fact is that a name change can lead to better business. 7-Eleven used to be called Tote’m because some of their stores had Alaskan totem poles at the entrance. The name was changed when the company introduced a new working schedule from 7 a.m. to 11 p.m., seven days per week.
  • The founders of Pizza Hut, Dan and Frank Carney, chose that name because they couldn’t afford more letters for the restaurant’s sign. Some still wonder what the name of the famous pizza place would have been if the founders had more than $600 in their pocket.
  • Some of the Subway franchise facts are quite remarkable. The famous BMT sandwich got its name from the Brooklyn-Manhattan transit system. The company once hosted a fashion show, all of the Subway locations smell the same, and there are 38 million combinations to make a sandwich.
  • Taco Bell was the first fast food restaurant chain offering food certified by the American Vegetarian Association. The company got its certificate in 2015, and now there is a dedicated vegetarian menu available.
  • You can order a burger in more than 250,000 ways at Five Guys. There are that many topping combinations and add-ons.
  • Speaking of Five Guys franchise facts, did you know that former US president Barack Obama is a big fan? In 2011, he was spotted at several Five Guys locations in Washington, DC, ordering lunch for himself and his colleagues.
  • A lot of people have a sweet tooth, especially for doughnuts. Dunkin’ Donuts, for example, serves 3 million customers a day, many of which are subscribers to the company’s coffee delivery service.
  • Since it was founded in 1945, Baskin-Robbins expanded its initial offering of 31 ice cream flavors to more than 1,000. Vanilla is still among the most popular choices.
  • Another interesting franchise statistic was recorded in 2013, when Friendly’s Ice Cream served  794 people at its headquarters. The event made it into the Guinness Book of Records as the “world’s biggest dessert party”.
  • James Monaghan, one of the brothers that founded Domino’s Pizza, could’ve been a millionaire. Instead, he gave his 50% stake in the company to his brother in exchange for a used Volkswagen Beetle. 
  • Kentucky Fried Chicken founder Harland Sanders used to practice law and deliver babies, among many other odd jobs he had before becoming a franchise owner.
  • On the healthier side of franchising facts, Gold’s Gym was among the first companies in the fitness industry to become a franchise. But it wasn’t the original owner Joe Gold that turned it into a corporation we know today. Thanks to Ken Sprague, and later Peter Grymkowsy, the failing business turned a profit, expanding into a franchise with 500+ locations.
  • Steve Kuhnau founded Smoothie King when he concocted a drink that even lactose-intolerant people can enjoy. He named it smoothie.
  • Martha Matilda Harper was not only the first woman in the franchise business, but her hairdressing business was the first commercial franchise of its kind. Each of the salons were run by a woman, and Harper ended up opening 500 locations across the country.
Franchise Facts and History - All You Need to Know 1

FAQ

How much money do you make owning a franchise?

There are many factors that determine how much money you’ll be able to make from taking up a franchise. So far, the food and beverage business has shown to have the highest potential for turning a profit, with an average annual income of $120,000. It also helps if you own multiple units. The initial investment might be higher, but so will your franchise revenue.

What are the top 10 franchises?

Here’s a franchise fun fact: the list of top franchises is heavily dominated by fast food chains. Among those are McDonald’s, KFC, Pizza Hut, Burger King, Domino’s Pizza, Dunkin’ Donuts, and Subway.

What is the most successful franchise to own?

The food and beverage industry is by far one of the best industries for franchises. The investment doesn’t have to be big. Daily running costs are lower than in other industries, while the turnover is undoubtedly the best.

What are 3 advantages of a franchise?

There are many advantages to having a franchise. It’s a proven recipe for growth and offers a source of capital with investors more likely to invest into a franchise establishment than smaller  businesses. A franchise also offers a way to overcome great distances. These franchise facts have helped many in the business world make money.

Sources:  

Franchise Direct 

Business Insider 

TBSeFM News

Wikipedia 


Julia A. is a writer at SmallBizGenius.net. With experience in both finance and marketing industries, she enjoys staying up to date with the current economic affairs and writing opinion pieces on the state of small businesses in America. As an avid reader, she spends most of her time poring over history books, fantasy novels, and old classics. Tech, finance, and marketing are her passions, and she’s a frequent contributor at various small business blogs.