A franchise is, by definition, a type of business owned by an organization that sells the right to use the brand name and sell its goods to local owners. The parent corporation then aids in every aspect of the business, in return for a combination of a flat fee from the local owners, plus fees based on profits or sales.
The franchisee is the one who purchases a franchise. The franchisee then runs a local unit of the purchased business. He or she is responsible for certain decisions, but many other decisions (such as the look, name, and products) are already determined by the franchisor and must be kept the same by the franchisee.