Franchise fees are charges to utility companies for the privilege of operating within municipal boundaries. They are a routine and common practice for municipalities across the state and the country. Examples are electricity, telephone, cable television, waste management and natural gas.
Franchise fees are implemented as part of a service agreement executed between a government and a utility company. These Service agreements outline the terms under which utility companies provide service to customers within a specific territory and local governments require them in order to ensure service to all customers in a geographic area.
