The history of the franchises that conquered the world

The history of franchises is, in essence, the story of a simple idea that has proven to work. When a business model is profitable and replicable, its growth stops depending on a single location and can expand on a large scale.

That formula, which today we associate with restaurants, stores and services of all kinds, began to take shape in the United States in the late 19th century and ended up spreading throughout the world, transforming the way of undertaking and growing in networks.

In a sector as competitive as franchising, knowing the origin and evolution of this system helps make better decisions if you’re considering investing, expanding or joining a network with a proven method, as happens in areas like automotive and aftersales, where belonging to a network of workshops can make a real difference.

What a franchise is and why it has worked so well

A franchise is a business collaboration system in which a brand allows an entrepreneur or company to operate a business under its name, know-how and processes. In exchange, economic conditions and rules are established that guarantee a uniform experience.

This idea has been so powerful because it combines two forces: the local drive of the person managing the point of sale and the advantage of a brand and model already successfully tested.

Over time, that standardization has become a key factor. In service networks, for example, consistency in customer service, processes and quality is what builds trust, which is why the model fits especially well in activities where reputation is earned day by day, as happens in automotive aftersales.

The origins: Singer and the birth of the modern model

When we talk about the origin of the system, many historical accounts place a turning point in the 1850s to 1860s in the United States.

In that context, companies like Singer Sewing Machine and also Cyrus McCormick’s mechanical reaper company appear as pioneers in commercial franchising, seeking to solve a very specific problem: how to distribute complex products, get them to more cities and ensure customers learned to use them.

That’s why Singer developed a system whereby it sold rights to local businesses to sell its machines and also teach buyers how to use them; something that made the company grow very quickly.

It’s a lesson that repeats itself over and over: when a product or service needs trust, training or support, franchising can be an enormous lever of help.

From industry to mass consumption: brands that scaled through franchising

As the model proved its usefulness, other companies adapted it to grow at lower cost and with greater distribution efficiency. In the most cited historical accounts on this topic, it’s mentioned how the system was adopted by companies like Coca-Cola, General Motors or Hertz, precisely for that ability to reproduce the business more efficiently.

Over time, franchising stopped being just a distribution mechanism and became a complete way of organizing any business that could be reproduced.

In practice, this meant the franchisee wasn’t just selling a product, but operating as an entire format: processes, suppliers, image, customer service and, in many cases, continuous training.

The explosion of the 20th century: restaurants and global brands

In the first half of the 20th century, many restaurant chains began using the franchise model, and in that group names are cited that today are part of the collective imagination, such as Kentucky Fried Chicken, Dunkin’ Donuts, Burger King or McDonald’s. That the restaurant industry adopted franchising so strongly makes sense when you consider that customers always like to recognize the product, price and experience in any city.

In this period an idea we now take for granted was consolidated: the value isn’t only in the final product, but in the system that allows repeating it with consistency. That consistency requires manuals, training, control and a brand capable of sustaining a recognizable promise.

From the United States to Europe: how the model was exported

The growth of franchising in the United States made other Anglo-Saxon countries take notice of this way of doing business. The model was exported to the European continent through the United Kingdom and then spread through France and Germany, later reaching Spain.

This movement wasn’t just a business fad. It responds to a deep change: consumption became more standardized, cities grew, mobility increased and brands began competing for visibility and trust. Franchising fit like a glove because it offered rapid expansion without having to own and operate each location directly.

In parallel, the model kept adapting to very different sectors. Over time, not only restaurants were franchised, but also specialized stores, home services, education, health, wellness and, of course, automotive services.

Franchising in Spain: from takeoff to consolidation

In Spain, franchise development arrived later. Everything indicates it began to appear timidly in the second half of the 20th century, in the late 50s and early 60s, when some French companies from the fashion and textile sector entered the country and opened stores under franchise arrangements.

Later, the model gained ground, although the major push came with the entry of large restaurant chains. For example, in 1975 Burger King opened its first establishment in Europe in Madrid and in 1981 McDonald’s opened a restaurant on Gran Vía, milestones that helped popularize and accelerate the franchise system with a future in Spain.

From there, franchising kept establishing itself as an entrepreneurship and expansion formula. Today it is a very widespread model in the national economy, and it is the Spanish Franchisors Association, created in 1993, that has the objective of overseeing and representing this model.

Why some franchises “conquered” the world

Not all franchises become global stories. Some achieve it because they solve universal needs with a clear proposal, and others because they build a system so solid it can operate in different cultural contexts.

In practical terms, there are several factors that tend to repeat:

• An easily recognizable brand, with a clear and consistent promise.
• Processes that can be taught and audited, so the standard is maintained.
• Training and support that prevent each franchisee from “reinventing” the business.
• Capacity for local adaptation without breaking the brand’s essence.

This combination is what allows growing quickly without the experience degrading. And when we talk about services, that consistency is even more sensitive, because the customer highly values trust and treatment.

What this history means for anyone who wants to start a business today

Knowing the evolution of the system helps you ask yourself more practical questions. It’s not just about whether a brand is well-known, but whether its model is reproducible, whether its proposal has sustained demand and whether the headquarters truly adds value beyond the name.

In the case of technical sectors, such as automotive maintenance, the history of franchising connects with something very current: the customer needs a guarantee of quality, access to technology, well-defined processes and trained professionals. That’s why, in the context of workshop networks, belonging to a franchise can provide real competitive advantages for those who want to start a business with more backing.

If you’re interested in this type of opportunity, you can find more information in the Franquicia Midas news section, where topics on the sector’s environment and the keys to starting a business with a consolidated network are covered.

Questions worth asking before choosing a franchise

History inspires, but the decision is practical. Before committing to a brand, it’s worth stopping and calmly evaluating aspects that tend to indicate the outcome:

• What support the headquarters offers: training, marketing, operations, technology and guidance.
• What level of standardization exists and how it’s controlled, since this impacts reputation.
• What initial investment is required and what recurring expenses there are: to avoid surprises.
• How the business fits with local demand and with your profile as a manager.

In sectors like automotive, where the customer values transparency and security, it’s also key to review the service approach, processes and ability to adapt to market changes, something that consolidated networks work on constantly.

The role of service networks: the automotive example

Unlike a purely product-based business, services live on trust. In automotive aftersales, for example, the customer looks for a workshop that clearly explains what will be done to the car, that meets reasonable deadlines and that maintains a constant level of quality.

That’s why, in today’s world, the franchise model makes a lot of sense in technical service networks: it allows standardizing processes, updating knowledge and sustaining a homogeneous experience, something especially relevant when the sector is undergoing transformations such as new mobility and electrification, which are already addressed as a trend in Franquicia Midas‘s news content.

If you want to better understand how a workshop network works and why it can be a strategy for starting a business with less uncertainty, you can find more information or get in contact with us to learn more about the model.