Benjamin Franklin: Father of Franchising?
September 2007 Franchising World
Document shows evidence of first U.S. franchise, first female franchisee.
By Hilary Strahota
His resume is impressive. While he is most known for his role in founding the United States, launching more than five inventions, serving as a diplomat during the American Revolution, scientific discoveries, writings and much more, his role as an entrepreneurial printer earns him yet another landmark in the history books.
For centuries, Americans have honored Benjamin Franklin as a major figure in American history, but evidence also points to Franklin as the first to franchise a business concept—printing.
For years, there has been much debate on how franchising began. But those theories have recently been challenged by Michael Seid, CFE, managing director of consulting firm Michael H. Seid & Associates, who identified documents which make a strong case that Franklin’s business dealings are parallel with those conducted in franchising.
Seid couples basic historical data printed in U.S. history books with a contractual document housed by the Department of Internal Affairs’ Land Office in Harrisburg, Pa. to make the argument that Franklin’s 16th century contract was the predecessor of the franchise agreement prepared by franchise systems in the 21st century.
It is common knowledge that Franklin, having learned printing from his older brother, became a printer, newspaper editor and merchant in Philadelphia. He published Poor Richard’s Almanac, the Pennsylvania Gazette and other items before he formed the first public lending library prior to franchising his printing business. The almanac was an annual publication reaching 10,000 print runs per year and was most popular for its collection of maxims, many of which used wordplay to deliver business insights. His saying, “remember that time is money,” is one echoed throughout the franchising industry today.
The document Seid references was created in 1733, when Franklin drew up a six-year contract that allowed Thomas Whitmarsh to establish himself as a printer in South Carolina. Franklin purchased the printing press and types in return for one-third of the profits.
When he was dispatched as a diplomat in France during the American Revolution, Franklin was able to reap the profits of his printing franchise through the multiple franchise partnerships he continued to form throughout the colonies. According to Seid, with the resources of the colonies stretched to fund the war, Franklin lived partially off of his income from his multiple franchisees. Without franchising, it is unlikely that Franklin would have been able to remain in Paris negotiating France’s participation on the side of the colonies, which historians conclude was essential for victory against the British.
First Female Franchisee?
How did the language in the contractual agreement, which authorized Whitmarsh and others to run another printing business, resemble that of the franchise disclosure documents of today? The similarities are notable.
The document is long and legalistic, containing statements that outline Franklin’s responsibilities to Whitmarsh, such as providing paper, ink, balls, tympans, wool, oil, rent for the print shop and any repairs and other things integral to the printing process. As the franchisee, Whitmarsh’s responsibilities to Franklin included abstaining from any other form of business and refraining from using any other printing materials not approved. The document was sealed by both parties and witnessed to confirm its legitimacy.
Although arrangements for Franklin’s first franchisee appeared to go smoothly, Whitmarsh’s premature death two years later of yellow fever caused Franklin to reappoint a new franchisee, his trusted journeyman, Lewis Timothée. When Timothée died a few years after that, Franklin was again forced to appoint a successor since Timothée’s son as listed heir, was not old enough to run a business. Timothée’s wife, Elizabeth, took over the printing franchise and, in effect, became the first female franchisee, marking yet another important event in American history.
Today’s Process Much More Complex
Unlike more than 250 years ago when Franklin picked his first franchisee based on personal reasons, the process for finding franchisees nowadays is much more complex. Today, the resources available to help prospective owner-operators, whether men or women, learn about this business model are plenty.
On the Web at www.franchise.org, the International Franchise Association’s content-rich site enables tomorrow’s franchise owners to transform their lifelong passions and strengths into realities in the form of the franchised-small business of their desires.
There, IFA also offers a free online course, “Franchising Basics,” and promotes the Federal Trade Commission’s “Consumer Guide to Buying a Franchise,” a brochure that helps franchisee candidates learn more about the industry and better determine if franchising is the right match for their entrepreneurial interests. A variety of educational seminars planned during the next few months offer topics to aid prospective investors, such as understanding their rights and responsibilities and the obligations of their franchisor.
Franchising is big and growing bigger daily. An IFA Educational Foundation study released in 2004 shows that there are more than 760,000 franchised businesses in the United States. A new version of this study is currently underway. If it weren’t for the nation’s founding fathers making independence possible and Ben Franklin launching a business model that made financial independence possible for franchised-business owners, the U.S. economy might not enjoy the more than $1.53 trillion franchises generate. More than 18 million Americans might not have jobs related to franchising.
Franklin’s entrepreneurial spirit, shrewd business skills and leadership qualities enabled him to affect the livelihoods of his time and on through the centuries to follow. Anyone who catches a glimpse of Franklin’s list of achievements can no doubt be impressed with how one person could have so many diverse interests and intellectual abilities. But what’s more mind-boggling is how Franklin was able to accomplish so many milestones in one lifetime.
While franchisees and franchisors of today aren’t likely called upon to help countries secure their independence, they are living testaments to the empowerment of financial independence. Like Franklin, they too have busy lives, whether as franchise executives or franchisees, working around the clock. Although they may not technically be diplomats as was Franklin, many franchises are expanding their systems internationally, allowing franchisees to sell U.S. products and services in foreign markets, thus serving as ambassadors of their brands.
Just as Franklin’s spirit lives on in the many sayings published in Poor Richard’s Almanac that have been instilled in the minds across the world, the franchised business model he launched, according to Seid, now lives on in thousands of small businesses that enable thousands of individuals to benefit from financial independence—being in business for themselves, but not by themselves.
Hilary Strahota is manager of public relations of the International Franchise Association. She can be reached at 202-662-0791 or firstname.lastname@example.org.