Bmgt 302 Franchising Economic Outcome Analysis

BMGT 302NameFranchising economic outcome analysisTutor’s Name9/12/2015Franchising BackgroundFranchising began with manufacturers granting exclusivedistributorships. In the 1860's, Singer Sewing Machine Co. used franchised distributorsto sell its products in the US. The motivation for franchising was shortage of capital and trained personnel to develop and operate a large number of corporate stores (Daszkowski, p. 2009) Following on the heels of manufacturing franchising cooperative franchising began round 1902 when a group of independent druggists formed their own private label manufacturer under the Rexall drug store franchise. This arrangement allowed the druggists to reduce their product costsand increase their profit margins (Daszkowski, p. 2009). Harper Hairdressing is believed to be the firstbusiness format franchise and bears great similarity to Andy’s concept.The founder ofHarper Hairdressing needed capital and motivated business operators to expand her business. She designed a franchising system that would enable poor women to become prosperousbusiness owners. The Harper Hairdressing Parlor franchise offered training and continuing guidance service and business methods. This laid down the principles used in modern day business franchising models (Plitt, 2000).Modern FranchisingAlthough it is defined in many ways a