Ace Hardware began in 1924 when five Illinois retailers formed a buying group. The founders created the organization to obtain better prices and compete more effectively with larger stores.
The company was named after World War I fighter pilots known as the “Ace” pilots. Unlike a conventional centrally owned retail chain, Ace developed as a retailer-owned cooperative. Independent store owners could use the Ace brand and benefit from shared purchasing, distribution, and marketing.
Ace Hardware later expanded across the United States and internationally through independently owned stores. This cooperative structure is an important distinction: Ace locations are generally owned by local retailers, rather than being ordinary company-operated branches. The business is nevertheless commonly described as a hardware franchise network.