What is a Franchise? The simplest answer to this question is that it is an act of distributing products owned by a Franchisor who has established a trademark of a business set up him and working under the established name of the franchisor company, the individual would pay a royalty to the franchisor for using its name. The individual who wishes to propose a franchise must have significant knowledge of the business. He only uses the business name under which he earns a certain amount of money. The individual proposing for a restaurant franchise will not be able to make any amendments to the given product line. It is possible that the franchisor may limit him to specific products thus not allowing him to use the brand name for other products. The taste of the items offered will have to be maintained well by the franchisee as an act of disruption may lead to a bad reputation of an already established business.