What are Franchise Fees and why do I have to pay them?
“Franchise Fees” are negotiated fees that local governments charge an entity for their use of the public rights-of-way. As is the case in Hoover, franchise fees are typically computed as a percentage of the entitys gross revenues within the local governments jurisdiction. Thus, franchise fees are, in some respects, similar to business license fees. They differ, however, in that other area businesses do not disclose their license fee charges on customer statements and store receipts when a consumer purchases a good or service from that business. Cable companies are allowed by federal law to itemize their franchise fees on cable customer statements. Federal law also stipulates that the maximum franchise fees charge by a local government is 5% of the cable companys gross revenues from their operation within the local governments jurisdiction.
