Final answer:
A franchisor is the party that grants the license to a franchisee to operate as part of a brand or chain. The franchisee pays fees in exchange for the right to use the franchisor's business model and ongoing support.
Step-by-step explanation:
An individual or organization granting a license to operate an individually owned business as though it were part of a chain of outlets or stores is known as a franchisor. A franchise is a business arrangement where the franchisor provides a licensed privilege to the franchisee to do business and offers assistance in organizing, training, merchandising, marketing, and managing in return for a monetary consideration. Franchising is a form of business by which the owner (franchisor) of a product, service, or method obtains distribution through affiliated dealers (franchisees).
For example, fast food restaurants like McDonald's are among some of the first and most well-known franchises. In this scenario, the franchisee pays a franchise fee along with ongoing royalty fees to operate under the franchisor's name and system.