Franchising has become a part of everyday life for most consumers in the United States today – it is everywhere. Numerous firms in a variety of industries have adopted franchising as a method of doing business. As a result, consumers now often purchase meals and hotel services along with car repairs, clothing, specialty foods, and many other types of goods and services through franchised companies. Why have so many firms involved in such different activities all chosen to organize themselves as franchised companies? We know that a combination of factors makes franchising desirable. On the one hand, the increased reliance of consumers on brand names, due in part to increased consumer mobility and greater time constraints, has played an important role in the development of retail and other chains. In addition, chains can benefit from lower costs through bulk purchasing programs and by realizing economies of scale in production, new product development, and advertising. These benefits, however, really explain why chains have become more prevalent in the economy, not why franchising has become so ubiquitous. After all, the stores in these chains could all be corporately owned, as is the case in many chains. Why then do we see so many other chains organized as franchises? The answer apparently lies in the capacity of franchising to combine the chain's comparative advantages in creating brand recognition and capturing economies of scale with the local entrepreneur's local knowledge and drive.