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1. (Government, Politics & Diplomacy) the franchise the right to vote, esp for representatives in a legislative body; suffrage. 2. (Government, Politics & Diplomacy) any exemption, privilege, or right granted to an individual or group by a public authority, such as the right to use public property for a business. 3. (Commerce) commerce authorization granted by a manufacturing enterprise to a distributor to market the manufacturer's products.
A franchise tax is a government levy (tax) charged by some US states to certain business organizations such as corporations and partnerships with a nexus in the state. A franchise tax is not based on income. Rather, the typical franchise tax calculation is based on the net worth of or capital held by the entity. The franchise tax effectively charges corporations for the privilege of doing business in the state. 1 Nexus.