In 1892 Hendee retired from bicycle racing and began making Silver King bicycles at 41-43 Taylor Street in Springfield, Massachusetts in 1895. In 1896, the Hendee & Nelson Manufacturing Company at 478 Main Street in Springfield, Massachusetts was building safety bicycles under the names
Silver King for men and
Silver Queen for women. The company went bankrupt; and Hendee purchased the entire inventory at auction and set up shop on Worthington Street in 1898, incorporating the Hendee Manufacturing Company with a capital stock of $5,000. The company's new line of bicycles was called
Indian. Hendee sponsored a number of bicycle racers and events throughout New England. It was during an event at Madison Square Garden in New York in January 1900 that Hendee became acquainted with
Carl Oscar Hedström and witnessed first-hand the excellent performance of the motorized pacing bicycle built by Hedström. Hendee and Hedström signed a partnership agreement in January 1901, and Hedström became the chief engineer and designer. The first Indian prototype was built by Hedström at the old Worcester Cycle Manufacturing Company in
Middletown, Connecticut, and the first public demonstration was held on Cross Street in Springfield, Massachusetts at 12:00 noon on Saturday June 1, 1901. Hedström traveled to Aurora, Illinois, to refine his engine design, and Hendee Mfg. Co. contracted and licensed the Aurora Automatic Machine Company to build the engine (the contract was terminated on March 5, 1907). Hedström supervised all aspects of manufacture, including the design of production molds and machines and expansion of both factories (the main factory on State Street and the forging factory "Hendeeville" in East Springfield), while Hendee, as president and general manager, traveled extensively to set up dealerships and arrange financing. By 1912, Hendee Manufacturing was the world's largest motorcycle manufacturer. In 1913, the company's production peaked at 32,000 units. The company's name was changed to Indian in October 1923. ==Retirement==