NPS Franchise Fees Exclude Out-of-Park Portions of Concessioner Operations

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A report prepared for the National Park Service by its expert consultants stated that the National Park Service is not allowed to charge franchise fees for revenue collected by its concessioner if the revenue was “realized” outside of the borders of the National Park unit.  The report addressed sightseeing tours which traveled both in and out of a National Park area.  It noted that NPS did not have the legal authority to require a concessioner to operate outside of the National Parks.  Therefore, revenue attributable to that portion of the sightseeing tours which occurred outside the National Park unit was not subject to the franchise fee.

The report noted that the current concessioner was in fact paying franchise fees based on that portion of the ridership which occurred outside of the National Park unit.  In order to assess the proper revenues for purposes of setting a franchise fee, the experts had to determine the portion of the tour rides which occurred within National Park areas.  These assessments were made as part of a franchise fee analysis for a NPS concession prospectus which was produced in the course of a federal lawsuit.  A heavily redacted copy was prepared for public release and the information noted above was set out in the redacted version.

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