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FRANCHISE Definition & Legal Meaning

Definition & Citations:

A special privilege conferred by government upon an individual orcorporation, and which does not belong to the citizens of the country generally, ofcommon right. It is essential to the character of a franchise that it should be a grantfrom the sovereign authority, and in this country no franchise can be held which is notderived from a law of the state. In England, a franchise is defined to be a royal privilegein the hands of a subject. In this country, it is a privilege of a public nature, whichcannot be exercised without a legislative grant. See Bank of Augusta v. Earle, 13 Pet.595, 10 L. Ed. 274; Dike v. State, 38 Minn. 366, 38 N. W. 95; Chicago Board of Trade v.People, 91 111. 82; Lasher v. People, 1S3 111. 226, 55 N. E. 663, 47 L. R. A. 802, 75Am. St. Rep. 103; Southampton v. Jessup, 162 N. Y. 122, 56 N. E. 538; Thompson v.People, 23 Wend. (N. Y.) 578; Black River Imp. Co. v. Hol- way, 87 Wis. 584, 59 N. W.126; Central Pac. R. Co. v. California, 162 U. S. 91, 16 Sup. Ct. 766, 40 L. Ed. 903;Chicago & W. I. R. Co. v. Dunbar, 95 111. 575; State v. Weather- by, 45 Mo. 20;Morgan v. Louisiana, 93 D. S. 223, 23 L. Ed. 860.A franchise is a privilege or immunity of a public nature, which cannot be legallyexercised without legislative grant. To be a corporation is a franchise. The variouspowers conferred on corporations are franchises. The execution of a policy of insuranceby an insurance company, and the issuing a bank-note by an incorporated bank, arefranchises. People v. Utica Ins. Co., 15 Johns. (N. Y.) 387, 8 Am. Dec. 243.The word “franchise” has various significations, both in a legal and popular sense. Acorporation is itself a franchise belonging to the members of the corporation, and thecorporation, itself a franchise, may hold other franchises. So, also, the different powersof a corporation, such as the right to hold and dispose of property, are its franchises. Ina popular sense, the political rights of subjects and citizens are franchises, such as theright of suffrage, etc. Pierce v. Emery, 32 N. H. 484.The term “franchise” has several significations, and there is some confusion in itsuse. When used with reference to corporations, the better opinion, deduced from theauthorities, seems to be that it consists of the entire privileges embraced in andconstituting the grant. It does not embrace the property acquired by the exercise of thefranchise. Bridgeport v. New York & N. H. R. Co., 36 Conn. 255, 4 Am. Rep. 63.


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