In an effort to evaluate the use of franchising as an economic development strategy in poor communities, this report explores the impact franchise businesses have on a local economy and compares it to the impact of independent businesses. The findings in the report are illustrated with a case study of two businesses, one a franchise and the other an independent. The relationship a franchise business must maintain with a parent corporation equips it with a set of constraints which diminish its positive impact on a local economy. The report finds that franchises reduce the economic multiplier of a local economy and, therefore, thwart economic development efforts. Independent businesses, on the other hand, contribute to a larger local economic multiplier. In an increasingly corporate and global economy, understanding the relationship between different forms of business and local economies is important for anyone interested in community development.