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The company began as "Fender's Radio Service" in late 1938 in Fullerton, California, USA. As a qualified electronics technician, Leo was asked to repair not only radios, but phonograph players, home audio amplifiers, public address systems and musical instrument amplifiers. (Technical note: at the time, most of the above were simply variations on a few simple vacuum-tube circuits). The business also sidelined in carrying records for sale and the rental of self-designed-and-built PA systems. He became intrigued by design flaws in current musical instrument amplifiers, and he began custom-building a few amplifiers based on his own designs or modifications to designs.
By the early 1940s, he had partnered with another local electronics enthusiast named Clayton Orr (Doc) Kauffman, and they formed a company named "K & F Manufacturing Corp." to design, manufacture, and sell electric instruments and amplifiers. Production began in 1945 with Hawaiian lap steel guitars (incorporating a patented pickup) and amplifiers, which were sold as sets. By the end of the year, Fender had become convinced that manufacturing was more profitable than repair, and he decided to concentrate on that business. Kauffman remained unconvinced, however, and they had amicably parted ways by early 1946. At that point Leo renamed the company the "Fender Electric Instrument Company."