From HistoryWiki

A company does not get a franchise from a village or city in the same context as one might purchase a franchise from a large company to operate locally representing that company's business. example: Purchasing a franchise to operate a McDonald's, or Red Robin, etc.

In the political world, to get permission to set up a business requires either an ordinance from the local governing body or the enactment of legislation at the State level. Which is a function of how the state's constitution was written and the provisions contained therein.

In Illinois, to open a McDonald's you would need a business license from the village or city. But, to operate a new railroad, you'd need an Act passed by the Illinois General Assembly.