Direction of financial analysis of the Commercial Services Program is set at the national level through regulation and policy development. Oversight activities include franchise fee analysis, financial feasibility analysis, market studies, sale and transfer reviews, and financial product overviews. Finance representatives serve on contract selection panels providing analysis and recommendations on the financial sections of prospectus offers. Financial technical support includes review, approval, and statistical compilation of annual financial reports (AFR) and special account tracking and reporting.
All concession contracts require concessioners to submit an annual financial report. There are two report formats, with a standard form as well as an abbreviated version for smaller concession contracts (as measured in terms of revenue). Both versions include: statement of income, balance sheet, detail of gross receipts, operational statistics, special account annual reconciliation, and special account project expenditures. As this process has become increasingly automated, it allows for improved access to data, provides timely and accurate reporting, improves responses to external stakeholders, and enables more robust financial analysis.
A concessioner pays a franchise fee to the government based on the value of the contract to the concessioner. This franchise fee is set at a level where a reasonable opportunity for net profit relative to capital investment and obligations of the contract exists. Although franchise fees are significant, the revenue the NPS gains from them is secondary to the protection and preservation of park areas and providing of necessary and appropriate services for visitors at reasonable rates.
The majority of these franchise fees go to the park in which the concessioner operates. Of the total raised by a specific franchise fee, 80% remain in the park where the funds were generated. These funds are reinvested to keep the concession operations in the park running efficiently. The Concessions Management Improvement Act of 1998 states that these funds shall be available "for use at the unit for visitor services and for purposes of funding high-priority and urgently necessary resource management programs and operations. The funds credited to a subaccount shall remain available until expended." The remaining 20% of the franchise fee is used for overall management of the NPS Commercial Services Program.