ABSTRACT
This chapter explains how franchising has evolved and includes some theory in order to facilitate an in-depth understanding of the concept's vast potential. The inclusion of several case studies of direct relevance to the microfranchising environment will bring the material to life. Modern-day franchising evolved during the 1850s when the Singer Sewing Machine Company established a network of franchised dealers that soon serviced the entire USA. Business-format franchising was the way to go because it placed franchisees under a contractual obligation to follow the network's tried-and-tested blueprint to the letter. Although franchising has been with us for a long time, few countries have franchise-specific legislation. In practice, for a franchise arrangement to be sustainable, the underlying contract must reflect the spirit of franchising. In the absence of specific legislation, forward-looking legal practitioners will draft franchise agreements to conform to the code of ethics published by their country's franchise association.
