Franchising Fever

For a haircut, workout or hearing aid, proceed to the nearest chain store

It is a time-tested way to build a big company. First come up with a good product or service and give it a catchy name. Then recruit an army of entrepreneurs to carry that name into cities and towns all across the U.S., or even the world. The phenomenon is known as franchising, and it has created millionaires galore and made empires of McDonald's, Holiday Inn and Baskin- Robbins.

Franchising may be a century-old idea, but it has never seemed fresher or hotter than in the U.S. of 1987. The business strategy that peppered the land with Golden Arches is in...