The Real Origin of the Franchise - Sir Harold Evans

Summary

The video script tells the story of Martha Matilda Harper, who pioneered the franchising model over a century ago with her hairdressing salons. Starting with a secret shampoo formula and a vision for a female-led business, Harper expanded her enterprise by empowering working-class women to own and operate salons under her philosophy. Her innovative approach laid the groundwork for modern franchises, from fast food to hotels, impacting half of retail sales in America today.

Takeaways

• 🍔 Ray Kroc is known for creating the world's biggest fast food chain, McDonald's, through a franchise model.
• 🏢 The franchise model allows small entrepreneurs to operate under a well-known brand with support, but without full ownership.
• 📚 The concept of franchising is often attributed to Ray Kroc and Isaac Singer, but its true origins lie in the beauty industry with Martha Matilda Harper.
• 🧼 Martha Harper, a Canadian-born maid, developed a scientifically based shampoo formula and a holistic approach to beauty and health.
• 💆‍♀️ Harper opened the first public hairdressing salon for women, overcoming societal norms and legal challenges of the time.
• 🛋️ She designed the first reclining shampoo chair, contributing to the practical innovations in her industry.
• 🌟 Celebrities and influential figures, including suffragettes and presidents, were clients of Harper's salon, highlighting its success.
• 🌐 Martha expanded her business by enabling working-class women to own and operate salons under her philosophy and brand, pioneering the franchise model.
• 💼 The Harper Method salons became a network of over 500 locations across America and later expanded to Europe, Central America, and Asia.
• 🏆 Martha Harper's franchising model has had a lasting impact, with half of retail sales in America now being through franchises.
• 📍 Today, the legacy of Martha Harper's innovative business model continues, even though only the original Harper Method Founder's Shop remains in Rochester, New York.

Q & A

Who is credited with creating the world's biggest fast food chain?

Ray Kroc is credited with creating what became the world's biggest fast food chain, McDonald's, by making a deal with the McDonald brothers.

What was the business model introduced by Ray Kroc when he expanded McDonald's?

Ray Kroc introduced a franchise operation model where small entrepreneurs could open McDonald's and run them as operators with an ownership state, different from the full ownership model of traditional Mom and Pop stores.

Who is sometimes credited with inventing franchising along with Ray Kroc?

Isaac Singer, the sewing machine magnate, is sometimes credited with inventing franchising.

What was the real genesis of franchising according to the script?

The real genesis of franchising was in the beauty industry, not in the sewing machine or fast food industries.

Who was Martha Matilda Harper and what was her contribution to the franchising model?

Martha Matilda Harper was a Canadian-born maid who created a successful hairdressing salon and developed the franchising model by installing working-class women in salons dedicated to her philosophy and products, which they owned.

What was the secret formula Martha Matilda Harper acquired while working for a doctor's family?

Martha Matilda Harper acquired a secret formula for a scientifically based shampoo while working for a doctor's family in Ontario.

How much money did Martha Matilda Harper save to open her first public hairdressing salon?

Martha Matilda Harper saved 360 dollars to open her first public hairdressing salon in Rochester, New York.

What was Martha's response to the challenges she faced in opening her first salon?

Martha hired a lawyer and won her case to rent the place for her salon, and her experience with illness propelled her ambition with Christian Science values.

What was unique about the business model Martha Harper implemented for her salons?

Martha Harper's unique business model involved working-class women owning the salons that were part of her network, dedicated to her philosophy and products, rather than being salaried employees.

How many salons were part of Martha Harper's network at its peak?

At its peak, Martha Harper's network included 500 salons in America, and later expanded to Europe, Central America, and Asia.

What is the current state of Martha Harper's business and its influence today?

Today, only the Harper Method Founder's Shop remains in Rochester, New York, but her health and beauty treatments have been copied, and her business model of franchising is dominant in retail sales in America.

Outlines

00:00

🍔 The Birth of Franchising: Ray Kroc and Beyond

The script begins by posing a question about the commonality between seemingly unrelated concepts and entities, such as beef burgers, baseball training, and auto mufflers. It then introduces the story of Ray Kroc, the salesman who expanded McDonald's into the world's largest fast food chain through franchising. Kroc's business model involved using the McDonald brothers' brand and methods, inviting entrepreneurs to operate as franchisees with ownership stakes, contrasting traditional full ownership business models. The script also mentions Isaac Singer as another figure sometimes credited with inventing franchising, but clarifies that the true origins of franchising lie in the beauty industry with Martha Matilda Harper, a Canadian-born maid who developed a scientifically-based shampoo formula and learned about physiology from a doctor. Harper's ambition was to run her own business, and despite setbacks, she eventually opened a public hairdressing salon in Rochester, New York, embodying Christian Science values in her services and focusing on holistic well-being.

05:03

👩‍💼 Martha Harper's Legacy: The Pioneer of Modern Franchising

This paragraph delves into Martha Harper's innovative business model, which laid the foundation for modern franchising. After successfully establishing her first salon and overcoming societal norms and legal challenges, Harper expanded her business by setting up a network of 500 salons across various continents. Unlike traditional franchising where agents are commissioned, Harper's model involved working-class women owning and operating salons that adhered to her philosophy and products. Her ethical approach and the success of her salons, which attracted celebrities and influential figures, made her business model a dominant force in the retail industry. Today, despite the majority of her salons no longer existing, her legacy lives on through the widespread adoption of her franchising concept, which now accounts for half of all retail sales in America.

Keywords

💡Franchising

Franchising is a business model where a company (the franchisor) grants an individual or entity (the franchisee) the right to operate a business under the franchisor's brand and system. In the video, Ray Kroc is credited with popularizing the concept through McDonald's, but the true origins are traced back to Martha Matilda Harper's hairdressing salon model, which involved working-class women owning and operating salons under her philosophy and products.

💡Ray Kroc

Ray Kroc was an American businessman known for expanding the McDonald's Corporation from a small barbecue restaurant into the world's biggest fast-food chain. The script highlights Kroc's deal with the McDonald brothers, which allowed him to use their brand name and methods, setting the foundation for the modern franchise business model.

💡McDonald brothers

The McDonald brothers were the original owners of a small restaurant chain that later became McDonald's. In the script, they are mentioned as the individuals with whom Ray Kroc made a deal, allowing him to use their brand and methods to expand the franchise model.

💡Martha Matilda Harper

Martha Matilda Harper was a pioneering businesswoman who created a hairdressing and beauty treatment empire in the late 19th century. The script describes her as the possible true inventor of the franchising model, where she enabled working-class women to own and operate salons under her Harper Method.

💡Harper Method

The Harper Method refers to the unique approach to hairdressing and beauty treatments developed by Martha Matilda Harper. It was holistic, focusing not only on physical beauty but also on spiritual well-being, emphasizing cleanliness, nourishment, exercise, and breathing. The script illustrates this method as integral to her salons' success and the basis of her franchise model.

💡Innovation

Innovation in the script refers to the development of new ideas, methods, or products. Martha Harper's innovation is highlighted through her salon business model and the first reclining shampoo chair, which were both ahead of their time and contributed to the success of her franchise.

💡Beauty treatments

Beauty treatments are services that enhance one's appearance, often involving hair and skin care. In the video, Martha Harper's beauty treatments are noted for their holistic approach, combining physical care with spiritual health, and have been widely copied, indicating their influence on the industry.

💡Entrepreneurship

Entrepreneurship is the process of designing, launching, and running a new business. The script discusses the entrepreneurial spirit of Ray Kroc and Martha Harper, who both took risks to innovate and expand their respective businesses, leading to the widespread adoption of the franchise model.

💡Ownership

Ownership in the context of the script refers to the legal right to control and benefit from a business. Martha Harper's model of franchising involved giving ownership of the salons to the working-class women who operated them, which was a novel approach at the time and a key aspect of her business model.

💡Christian Science

Christian Science is a religious movement that emphasizes spiritual healing and the power of prayer. In the script, Martha Harper's encounter with a Christian Science practitioner during her sickness influenced her business philosophy, incorporating spiritual values into her beauty treatments and salon operations.

💡Reclining shampoo chair

The reclining shampoo chair is a piece of salon furniture designed for a more comfortable shampooing experience. Martha Harper is credited with designing this chair, which became a practical innovation in her salons and an example of her forward-thinking approach to business.

Highlights

Ray Kroc is credited with expanding McDonald's into the world's largest fast food chain through franchising.

Franchising is a business model where small entrepreneurs operate under a larger brand with support, unlike traditional Mom and Pop stores.

Isaac Singer and Ray Kroc are often credited with inventing franchising, but the true origin lies with Martha Matilda Harper.

Martha Matilda Harper, a Canadian-born maid, developed a scientifically-based shampoo formula while working for a doctor's family.

Martha Harper opened the first public hairdressing salon in 1888 in Rochester, New York, despite societal opposition.

Harper's hairdressing salon was pioneering, as women in business were rare, especially in public hairdressing and skincare.

After falling ill, Martha Harper was healed by Mrs. Helen Smith, a Christian Science practitioner, inspiring her to infuse spiritual values into her business.

The Harper Method emphasized the importance of spiritual and physical health for beauty, combining hair care with holistic wellness.

Martha Harper designed the first reclining shampoo chair, though she did not patent the invention.

Harper's salon attracted celebrities, who urged her to expand her business to other cities.

Martha Harper's innovation in business was to franchise her salons, empowering working-class women to own and operate them.

By 1891, Harper's franchise model expanded to 500 salons across America, Europe, Central America, and Asia.

Harper's salons were endorsed by influential figures like Susan B. Anthony, Woodrow Wilson, and Jacqueline Kennedy.

The Harper Method Founder's Shop remains in Rochester, New York, as a legacy of her contributions.

Martha Harper's franchising model is the foundation of modern franchising, which now accounts for half of retail sales in America.

Martha Matilda Harper's innovation in franchising significantly influenced industries beyond beauty, including fast food and hospitality.

Transcripts

(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.