A franchise agreement is negotiated between the City and an entity (usually a utility) that wishes to place private facilities in the public rights-of-way in order to facilitate provision of utility services to itself or its customers. These agreements detail the rules by which an entity is allowed to construct its facilities within the City rights-of-way, such as the size of the facilities, the depth the equipment may be placed, the distance between the facilities being placed and those previously placed by other companies, etc. They detail permitting and construction laws and insurance requirements necessary to protect the City and the safety of the traveling public.
Franchise agreements also detail the amounts the entities have negotiated to pay for the privilege of using public rights-of-way, as well as rules regarding the administration of the agreement. The City's Revenue & Finance Department collects, audits and administers the resulting franchise fee revenues