hi! can someone help to define the difference between Franchise vs. Chain Store? Thank you.
A person who operates a franchise business owns his own business but has to pay to the franchise owner, but a chain is owned by the central corporation and all the employees are employees of the "big" business.

See this: http://msucares.com/business_assistance/homebusiness/q11.html
The franchisee pays the franchisor for the business opportunity and agrees to operate the business according to the franchisor's directions. The franchisor owns all the trademarks, business methods, and supplies that it allows others to use under its contract. The difference between a franchisor's and corporation's operating a chain of stores is that the chain store has store managers who are company employees, whereas the franchise operation is owned and managed by self-employed business people.
thanks for your help!

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No, it is the other way around I believe. A franchise can be bought by a person and every store could have that one persons rules and standards but a chain store is managed by different people who have to pay the chain owner.
Can you provide a few links to back that up? Your version is the opposite of all the information I've seen.
There is a franchise article on the Franchise Foundations website discussing this difference, as well as the profitability aspects of operating these different distribution mechanisms.

A franchise chain is usually operated by a network of independently owned franchise owners, although some franchise chains, like McDonalds, penetrate markets with both franchised and company-owned restaurants. This is called dual distribution.

A company-owned chain is a network comprised of locations that are all owned by a single entity. All retail Starbucks locations in the U.S., for example, are owned by Starbucks - except for some in airports and bookstores that may be "licensed."

There is an article on the Franchise Foundations website discussing this difference.

Mr. Franchise
Kevin B. Murphy, B.S., M.B.A., J.D.
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Chain store is owned and operated by a single organization and franchise is the right to operate a business or to sell a produt.
Example of a chain = J.C.Penney which owns all of its stores.

Example of the franchise = McDonald's where individual operators own the sites but operate under the McD name.