What is the difference between a chain and a franchise?

Understanding the difference between chain and franchise businesses is crucial for understanding their primary functions. Both types of businesses operate under a known brand name, offering various benefits. However, the ownership of the stores varies significantly. Chains are stores under the same brand that are all owned by the same parent company, while franchises are stores that may be under the same brand but are owned and operated by separate individuals who are solely responsible for day-to-day operations. Ultimately, the parent company is over day-to-day operations in a chain, while a separate individual is solely responsible for day-to-day operations in a franchise. Financing is solely through the parent company‘s lenders or by reinvesting profits in a chain, while franchisees pay initial investment fees and ongoing royalties to sustain the franchise. Chains have higher payroll, as they must hire management to cover all operating roles of the business, while franchises have lower business costs as the owner can act as management. Profits and losses stay within the parent company in a chain, while in a franchise model, the franchisor must share both profits and losses with the franchisee.