Legal Definitions - special franchise

A special franchise is a specific grant of authority from a government entity (such as a state, county, or municipality) to a private company. This grant allows the company to use public property or rights-of-way to provide a public service, often involving the installation and maintenance of infrastructure on or under public land. It is distinct from a general business license because it confers unique rights to utilize public resources for a particular purpose, such as operating a utility or a transportation system.

Here are some examples to illustrate this concept:

• Imagine a city that needs to ensure its residents have access to reliable internet. The city might grant a private telecommunications company the exclusive right to lay fiber optic cables under public streets and sidewalks, and to install utility boxes on public easements, to deliver high-speed internet services throughout the community. This is a special franchise because the city is giving the private company specific permission to occupy and use public property (the land under streets, sidewalks, and easements) for its infrastructure to provide a public utility service.

• Consider a state that wants to develop a new toll road to alleviate traffic congestion. The state could enter into an agreement with a private construction and management firm, granting them the right to build, operate, and collect tolls on a highway that crosses public lands and existing public rights-of-way. This arrangement constitutes a special franchise because the state is conferring upon the private firm the unique authority to construct and manage a transportation system on public property, along with the right to generate revenue from it.

• Think about a small town that relies on a private company to manage its water supply. The town council might issue a permit allowing this private water utility to install and maintain water pipes beneath public roads, place water meters on public property, and access public land for reservoir maintenance. This is a special franchise because the town is granting the private company the specific legal right to utilize public infrastructure and land for the essential purpose of delivering and managing the public water supply.