The Rule
When seeking to learn God's will with his companions, he took out the Bible and randomly opened it three times. It fell on these three readings:
“If you would be perfect, sell all you have and give to the poor, and come, follow me.”
“Take nothing with you for your journey: neither staff, nor scrip, nor bread, nor money;”
and
“If anyone would come after me, let him deny himself, take up his Cross and follow me.”
This became their first rule. They sold all they had and gave it to the poor, then took on Francis' simple barefoot peasants attire and became the beginning of the order of Franciscans.
One version of this story can be seen here: http://www.ccel.org/ccel/ugolino/flowers.iii.ii.html
This rule was approved by Pope Innocent III when Francis and his followers went to Rome for approval.
Lady Clare, who had already heard a call from God to a religious life, upon hearing one of Francis' sermons, became interested in joining his order. She desired, like Francis, to give all to God. It took some time and discussion, but eventually she left her home and family to become the head of a new order (the Second Order of Franciscans) of cloister nuns, the Poor Ladies, later called the Poor Clares, whose convent was prepared adjoining San Damiano church, the first church in which Francis had heard his call, and had rebuilt the church with his own hands. Their rule was based on Francis' first rule. For more on Clare and the Poor Clares, see “about Clare."
Later, in his last years, he would write a more detailed “rule” designed for the increasing order to be able to manage after he was no longer with them. There was some disagreement in the order as to how strictly Francis' original rule should be observed, and some disappointment in Francis as the order took on a life if its own, moving away from the simplicity of following the simple Gospel commands of Poverty. He resigned as head of the order and became what he was called to be again, the Poverello (little poor man) of Assisi. It was during this time, in his last years, that he received the stigmata.
Bio links:
http://www.ewtn.com/library/mary/francis.htm
http://www.ccel.org/ccel/ugolino/flowers.ii.i.html
http://www.franciscan-friars.org/vocations/saint_francis.asp
http://www.pathguy.com/francisc.htm (Episcopal site)
http://www.shrinesf.org/francis_menu.htm
http://en.wikipedia.org/wiki/Francis_of_Assisi