More likely retail- in my town the bookstore, stationary store, newsstand, hardware stores, etc. were all family owned until the big box stores opened up two towns over.
When I was a kid the only businesses I can remember being non-locally owned were a Safeway and branches of two state-wide banks. This is in a town of 20k or so (at the time). There were small local manufacturing firms, 100% of restaurants were local (no chains), nearly all grocery stores were family owned, you could still make a living as a rancher.
Obviously there were franchises (gas stations, a small Sears store mostly for catalog ordering) but not very many.
And local druggists whose pharmacies also provided other services. It's not a particularly American thing, this transformation is everywhere --that does not imply it's good for everyone.
Are you sure that's not just due to people moving away from agriculture? A family farm is a thing, but not really a family factory.