Franchising Since: 1925
Headquarters: Estero, Florida
Estimated Number of Units: 11,600 (across all brands of Hertz Global Holdings, Inc.)
Franchise Description: Hertz System, Inc. is the franchisor. The franchisor is a wholly-owned subsidiary of The Hertz Corporation. Hertz Global Holdings, Inc. is the ultimate parent company. Hertz Global operates the Hertz, Dollar, Thrifty and Firefly vehicle rental brands. The franchisor conducts and franchises others to conduct vehicle rental businesses which provide a vehicle for hire without a driver for a period of 365 days or less for transient rental purposes, and insurance and mechanical related vehicle replacement purposes (including those rentals or leased cars that are billed to or reimbursed by another party or are the result of a referral for such purpose). Such vehicle rental businesses are conducted are franchised to be conducted) under a plan or system, which is identified by the “HERTZ” mark and other related proprietary marks.
Training Overview: Prior to opening the franchised business, franchisees, their manager and key employees must, at the sole expense of the franchisee (including all travel and living expense), attend and complete all required initial training programs and courses. In addition, the franchisor may require that franchisees, at their expense (including all travel and living expense), attend remedial training programs and courses as the franchisor deems necessary to improve the operation of the franchised business. Franchisees, their manager and key employees may, at their option and sole expense (including all travel and living expense, and the payment of associated training fees, if any), attend and complete other optional training programs and courses that Hertz offers from time to time. Franchisees must also implement a training program for all employees of the franchised business for the operation of the franchised business in compliance with the then-current standards and procedures. The franchisor may also provide franchisees and their employees with the option of attending training programs conducted by the franchisor’s parent company for employees at one of its company-owned operations.
Territory Granted: Franchisees will not receive an exclusive territory. Franchisees may face competition from other franchisees, from outlets that owned by the franchisor, or from other channels of distribution or competitive brands controlled by the franchisor. Franchisees will be granted a non-exclusive, geographic territory in which the franchisee will operate their franchised business. The franchised territory varies from franchisee to franchisee, and will be identified by, at a minimum, the name of a city or other political subdivision(s) in the Franchise Agreement.
Obligations and Restrictions: Franchisees must devote a significant amount of personal time, energy and direction, and their best efforts to developing, conducting, managing and operating their franchised business. Franchisees must employ (or serve as) a manager who must: (i) be disclosed to the franchisor; (ii) complete required training; and (iii) have sufficient vehicle rental business experience to manage and operate the franchised business; and (iv) devote full time to the management and operation of the franchised business. An employed manager is not required to have an equity interest in the franchised business. Franchisees must rent only cars which meet the franchisor’s standards and specifications (including, the types, quality, fuel source, emissions profile, size, mileage, model year or age, and brand of cars) as the franchisor may from time to time prescribe in the manuals or otherwise in writing. Franchisees also must operate their franchised business in conformity with such standards, specifications and procedures as the franchisor may from time to time determine and prescribe, including with regard to the products and services authorized to be used and rented at their franchised business.
Term of Agreement and Renewal: The initial franchise term is given in the Franchise Agreement, and begins on the effective date and ends on the expiration date set forth in the agreement. The Franchise Agreement may be renewed, if requirements are met.
Financial Assistance: The franchisor does not offer direct or indirect financing. The franchisor will not guarantee a franchisee’s note, lease, or obligations.
Investment Tables:
| Name of Fee | Low | High |
|---|---|---|
| Initial License Fee | $25,000 | $100,000 |
| Training Expenses | $3,000 | $3,000 |
| Passenger Cars | $750,000 | $15,000,000 |
| Courtesy Vehicles (per location) | $55,000 | $350,000 |
| Equipment and Supplies | $5,000 | $20,000 |
| Insurance | $5,000 | $40,000 |
| Real Estate and Improvements | Varies | |
| Professional Fees | $3,000 | $10,000 |
| Computer Systems, Hardware and Software | $11,500 | $250,000 |
| Optional Software | $1,500 | $15,000 |
| Business License | $100 | $500 |
| Miscellaneous Installation Fees | $200 | $500 |
| Additional Funds - 3 months | $20,000 | $50,000 |
| ESTIMATED TOTAL (excluding real estate & improvements) | $879,300 | $15,839,000 |
| Type of Fee | Amount |
|---|---|
| Franchise Fee | Ranges from 7% to 9% of gross receipts derived from the franchised business, subject to a minimum annual amount determined by us based on various factors including, without limitation, market size, and number and type of locations. |
| Program Assessments | Will vary. |
| Insurance | Cost of procuring insurance for the franchisee. |
| Reservation Charges | Fee is assessed for each reservation made through Hertz’s reservation system. Currently, the reservation charge is $3.84 to $6.30 per passenger car reservation. |
| Rate Management Services | Estimated to range from $100 to $6,000 per location per month depending on the level of service, number of users, location and fleet size and whether it is a multiple brand location and the complexity of the market. |
| Travel Industry Commissions | 0-30% of gross rental charges. |
| Travel Vouchers | Service fee presently equal to 5% of net proceeds of the voucher. |
| EDI Cost | $6.50 for TSD and $1.50 for OKC Administration for a total of $8.00 per reservation. |
| Hertz Rental Processing Fee | 2.5% for auto feed; 4.6% for manual feed for insurance and service replacement customers. |
| Guaranteed Charge Cards -Service Fees | Currently between 1% and 5% of gross rental charges. |
| Charge Cards Guaranteed by Parent - Service Fees a) Central Bill Charge Card Service Fees b) Direct Bill Charge Card Service Fees | See sub-categories below: May range from 2.5% to 6% of gross rental charges. May range from 3% to 6% of gross rental charges. |
| Inspection Fee | Cost of inspection. |
| Reservation Assignment Fee | $3 to $7 per reservation made through reservation assignment system. |
| Interest and Late Fees | Interest at the lesser of the rate the franchisor prescribes, or the maximum rate allowed by law, plus a late fee of not less than 5% of the total amount overdue. |
| Supplier Testing | Will vary under circumstances. |
| Liquidated Damages for Non-Compliance Fee | $100 per day that the breach persists; additional $5,000 if violation still persists after 90 days. |
| Renewal Fee | $5,000 to $10,000 |
| Transfer Fee | 5% of the average annual gross sales for the three years immediately preceding a transfer by franchisees. |
| Holdover Fees | The then-applicable Franchise Fee and other such fees and assessments being charged by the franchisor. |
| Security Deposit | Will vary under the circumstances. |
| Early Termination Fee – Liquidated Damages | Will vary under the circumstances. |
| Audit Fee | Cost of the audit if the franchisor discovers franchisees have underreported by 2% or more or it discovers franchisees have failed to comply with any provision of the Franchise Agreement or any other agreement between franchisees and the franchisor or its affiliate(s). |
| Value Proposition Services | $0 - $150,000 depending on the franchisee’s selection of optional products and services offerings. |
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