The Real Origin of the Franchise - Sir Harold Evans

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One of the most successful business models is the franchise, but it didn't originate with McDonald's. Sir Harold Evans, the author of They Made America, describes the remarkable story of a beauty salon that allowed hundreds of women to own their own businesses.

Lesson by Sir Harold Evans. Animation by Sunni Brown.

(Music)

Quick! What's common between

beef burgers, baseball training

and auto mufflers?

Tough question. Let's ask it another way.

What's the common factor between McDonald's,

D-Bat and Meineke?

You may know the answer if, along with a Big Mac,

you've absorbed a fragment of the romantic story of Ray Kroc.

He's the salesman that created what became

the world's biggest fast food chain.

He did it by making a deal

with a couple of men called the McDonalds.

Brothers they were, owners of a small restaurant chain,

and the deal was, he could use their brand name and their methods.

Then he invited small entrepreneurs

to open McDonald's, that they'd run as operators,

with an ownership state.

Very different than the business model where Mom and Pop stores

have full ownership, but no similar support.

All the examples

in my opening question are a franchise operation.

Kroc is sometimes credited

with inventing franchising,

and so is Isaac Singer, the sewing machine magnate.

Not so. The real genesis of franchising

was not in stitches or beef,

it was in beauty.

Martha Matilda Harper

was a Canadian-born maid.

She made the beds, cleaned house, did the shopping.

In the employment of a doctor's family in Ontario,

she acquired a secret formula for shampoo,

one more scientifically based

than the quackeries advertized every day in the newspapers.

The kindly doctor also taught the maturing young woman

the elements of physiology.

Martha had a secret ambition

to go along with the secret formula:

a determination to run her own business.

By 1888, serving as a maid in Rochester, New York,

she saved enough money --

360 dollars -- to think of opening

a public hairdressing salon.

But before she could realize her dream,

two blows fell. She became sick,

and collapsed from exhaustion.

Mrs. Helen Smith, a healing practitioner

of the Christian Science faith, was summoned to her bedside.

The two women prayed, and Martha recovered.

No sooner was she better then she was told,

"Oh no, you can't rent the place you've eyed."

You see, her venture was to be the first public hairdressing salon.

A woman in business was shocking enough then.

Only 17 percent of the workforce in 1890 was female,

but a woman carrying out hairdressing

and skincare in a public place?

Why, it was sure to invite a scandal.

Martha spent some of her savings on a lawyer, and won her case.

She proudly displayed on the door

of her new her salon a photograph

of the barely five-foot Martha as Rapunzel,

with hair down to her feet, but glowing with good health.

Her sickness, too, had proved a boon.

Her ambition was now propelled

by Christian Science values.

The Harper Method, as she came to call her services,

was as much about servicing the soul

as it was about cutting hair.

In the therapeutic serenity of her salon,

she taught that every person could glow

with the kind of beauty she had,

if spiritually whole and physically obedient to what she called

"the laws of cleanliness, nourishment,

exercise and breathing."

She was very practical about it.

She even designed the first reclining shampoo chair,

though she neglected to patent the invention.

Martha's salon was a huge success.

Celebrities came from out of town

to experience the Harper Method.

They enjoyed the service so much

that they urged her to set up a salon in their cities.

And this is where Martha's ethical sense

inspired her crowning innovation.

Instead of commissioning agents, as other innovators had done,

from 1891, she installed

working-class women just like herself

in salons exactly like hers,

dedicated to her philosophy and her products.

But these new employees

were not provided a salary by Martha.

The women in what became a satellite network of 500 salons

in America, and then Europe and Central America

and Asia, actually owned the Harper's Salons.

What was good enough in the nineteenth century

for suffragette campaigners like Susan B. Anthony

and was good enough in the twentieth century

for Woodrow Wilson, Calvin and Grace Coolidge, Jacqueline Kennedy,

Helen Hayes and Ladybird Johnson

must be good enough for the rest of the world.

Today, only the Harper Method Founder's Shop

remains in Rochester, New York, but Martha's legacy is manifold.

Her health and beauty treatments have been copied,

and her business model is dominant.

In fact, half of retail sales in America

are through Martha Harper's franchising idea.

So the next time you enjoy a McDonald's hamburger

or a good night's rest at a Days Inn,

think of Martha.

Because these franchises might not be the same

without her inventing the model, over a century ago.