When setting up a business, an entrepreneur may decide to set up as a franchise rather than an independent business. A franchise is when one business, the franchisor, gives permission to an entrepreneur, the franchisee, to set up a business using its brand name and selling its products. In return, the franchisee pays the franchisor an initial fee and an ongoing share of the profits. As the franchisor’s business is already established and successful, starting up a franchise is seen as a Less risky option than setting up independently.