One of the earliest marketing efforts of Berlitz, from the Atlanta branch
Records accidentally discovered during a renovation, together with company archives, prove that Berlitz started franchising in 1889 and is perhaps, the oldest franchisor still franchising today.
In 1978, Berlitz was conducting some renovation works at its Brussels center. During the renovation, one of the contractors accidentally knocked off a wall and, to the surprise of the construction crew and the center staff, they discovered a hidden chamber. What they found in that chamber was a treasure of history; not only for Berlitz; but also, for the franchise community as a whole.
Berlitz was incorporated in Providence, Rhode Island, USA in May of 1878 by German immigrant Maximilian Berlitz. Some of the files that were found in that chamber included student records, contracts, lease agreements, pictures, certificates of business incorporation and more. For example, there was a memo from the then current Queen of Belgium, requesting to keep her enrollment with Berlitz discreet. There were documents from Nicholas the II, last Tsar of Russia, records of Mr. Berlitz being personally responsible for teaching English to Emperor Wilhelm II and, more relevant to this publication, documents related to the beginnings of Berlitz franchising, dated over 127 years ago.
Records found in this incident, together with archives from Berlitz France, proved that Berlitz started franchising in 1889 and is, perhaps, the oldest franchisor still franchising today. Singer, although it does not franchise anymore, has been often credited to be the oldest franchisor in modern history. Nevertheless, if we go by the modern conceptualization of Franchising, Singer probably lacked one element: royalties.
In 1888, Maximilian Berlitz granted its first Area Development Agreement for Europe to Henri Mallat, a dedicated Berlitz professor. In 1889, Mr. Mallat granted the very first Berlitz Franchises in Germany and France.
In 1907, the Société Internationale des Ecoles Berlitz (SIEB) was set up. The new company was managed by Benoît Collonge & Wellhoff. The value of the company was based on 30 schools owned by the SIEB, 20 schools belonging to partners, 27 British schools and the franchise rights of 260 centers in Europe, Africa, Latin America and Australia. North America and Canada were managed by the Berlitz Schools of America (BSLA), of which Maximilian Berlitz was President. By 1910, Berlitz already had more than 400 centers around the world.
One of the early Berlitz schools
At that time, French was a widely used language for business. The French term that was used for Berlitz Franchises was “Concession”.
Berlitz started with five common types of Franchises:
- With obligation to open a Language Center in a city(ies), town(s) or a region (Designated Territory); within one year (Development Schedule)
- With obligation to open a Language Center in the Designated Territory within three years
- No obligation to open in the Designated Territory but payment of a higher annual [royalty] fee
- Franchise License for a private teacher to teach at a particular place; typically granted for smaller towns, or
- À la carte
Since the early years, the Berlitz Franchise Agreements were well-structured, and contained the modern Elements of Franchising. Among other information, they contained:
- The use of trademark “The Berlitz School of Languages”
- The right and know-how to “open, operate and profit from a living languages school”
- Designated territory
- Term of agreement
- Renewal terms
- Use of “Operations manual” or detailed guidelines for the setup and management of the center, including advertisement, insurance, payment of taxes, heating and lighting
- Royalties, typically paid every 6 months
- Initial fee
- Transfer of Franchise rights upon agreement by Franchisor
By 1912, Berlitz Franchise Agreements where approximately 10 pages long and, in essence, they were very similar to the franchise agreements we use today.
Franchisees and their families were often housed in the school and managed the centers as family businesses. Some centers were owner-operated and others had Center Directors, upon approval by Franchisor. It was not uncommon for franchisees to own multiple units, even in multiple countries.
The Edwardian era was a period of expansion, where royals and celebrities were teaching or being taught at Berlitz Centers. Alfonso XIII, King of Spain, was being taught English, French and German; while Leon Trotsky, James Joyce and Wilfred Owen were teaching at Berlitz centers in Mexico City, Trieste and Bordeaux, respectively.
Then, the period of the two World Wars came. It was a veritable calamity for Berlitz. The international and multicultural nature of Berlitz had encouraged mutual respect and admiration among its staff and students. The company, which had always transcended borders, would become the victim of its own success. Disaster was unprecedented. Many schools closed following bombing raids, or as a result of regime changes or because of redefinition of national borders. The Berlitz teams were largely made up of French, British and German teachers. People who had been close friends would become future enemies**.
In 1940, during WWII, Thérèse Delpeux was elected President and Managing Director of Berlitz becoming, perhaps, the very first woman in history to lead a global organization.
After WWII, the era of The Wonderful World of Berlitz came**. There was a fast recovery, mostly due to a special grant that the American Army awarded to all veterans based in Europe. GI applicants living in Europe could register up to 25 lessons a week (1 lesson is 45 minutes) in one or more languages of their choice. Then, in the Sixties, franchising took a second breath. For companies and society, it was a carefree time of great optimism, renewal and rebirth. Classes took place in an extraordinary atmosphere and coming to Berlitz meant combining the useful with the pleasurable**.
The Berlitz Opera center in Paris, also known as the “Palais Berlitz”, was a veritable hive of language activity. It was frequented by stars from the world of entertainment (Maurice Chevalier, Louis de Funès, Gérard Depardieu, Claude Brasseur), politicians (François Mitterrand), members of royal families (the Duke of Windsor) , and other celebrities whose paths crossed in the enormous maze of classrooms (more than 100 in this center!)**.
Gina Lollobrigida and President Nixon using the Berlitz Italian Book
In 1966, Berlitz was acquired by Macmillan Inc. and, changing corporate strategy, the new ownership did not allow franchises from 1967 to 1972, with the exception of those granted in perpetuity; these being mostly in Egypt.
Then, in 1988, Macmillan Inc. was acquired by Maxwell Communication Corporation. Upon the death of Robert Maxwell in the early nineties, Berlitz became fully owned by Fukutake Publishing Company (now Benesse Corporation); previously, a minority shareholder. Today, Benesse is one of the largest privately held education companies in the world, with annual sales of approximately 4.5 Billion USD a year.
Today, Berlitz continues to be the leading language and communication skills training company worldwide. It operates over 450 centers in more than 70 countries. Berlitz has taught millions of people how to speak a new language, better communicate and helped achieve their dreams.
From left to right: Mark Harris, Rogelio Martinez, Constant Reinders and Marc Verger, during the Berlitz 2015 Franchisee Convention in Zagreb, Croatia.
Special thanks to Mr. Mark Harris, Chairman of Berlitz Corporation, who appointed Mr. Constant Reinders to study, sort and protect the Berlitz archives containing over a century of Berlitz history. And thanks to Constant Reinders who, after 40 years of service as Berlitz employee, took this new assignment and published the book “Berlitz – 130 Years of Innovation and Passion for Teaching”. This article based most facts and figures from Mr. Reinders book. ** indicates excerpts from Mr. Reinder’s book.
About the author: Rogelio Martinez, CFE, is the President of Berlitz Franchising Corp., www.berlitz.com. He is a member of the IFA’s International Committee and speaks 5 languages.