Is franchise business halal?

Most contemporary scholars accept it. You are paying for the continuing use of a brand, system and support services that carry genuine value, and the basis of calculation is agreed in advance even though the amount varies with your sales. This is the same reasoning applied to percentage-based brokerage and to profit-sharing arrangements more generally.

This should be resolved before signing. Many international franchisors permit menu adaptation for particular markets and already operate fully halal outlets, so ask directly whether your outlet may exclude non-permissible items and get the answer in writing. Where the franchisor requires you to sell the full menu including alcohol or pork, you would be contractually obliged to sell prohibited products, which is a different and more difficult position.

An interest-bearing business loan is riba regardless of what it funds, so it is assessed as its own separate contract. This is the practical obstacle most Muslim franchisees face. Islamic business financing through murabaha or diminishing musharakah, equity partnership with investors sharing profit and loss, and staged entry with accumulated capital are the routes people actually use.