Hertz Franchise Cost & Fees

SKU: 2dfb46b67f85 Category: Tag:

Description

Year Business Began: 1925Franchising Since: 1925Headquarters: Estero, FloridaEstimated Number of Units: 10,200 (across all brands of Hertz Global Holdings, Inc.)Franchise Description: Hertz System, Inc. is the franchisor. The Hertz Corporation, the parent company of the franchisor and subsidiary of Hertz Global Holdings, Inc. (the ultimate parent company), operates the Hertz, Dollar and Thrifty vehicle rental brands. The franchisor and its affiliates license others to conduct, businesses that rent or lease cars without drivers, including for 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) under a plan or system, which is identified by the “Hertz” mark and other related proprietary marks. If approved by the franchisor, qualified applicants will have the right to sign a Franchise Agreement for the establishment and operation of a Hertz Business within the area of responsibility designated in the Franchise Agreement.Training Overview: Prior to opening the Hertz 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 Hertz deems necessary to improve the operation of the Hertz 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 additional training programs and courses that Hertz offers from time to time. Franchisees must also implement a training program for all employees of the Hertz Business according to 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 for employees at one of its company-owned operations. Hertz also offers training courses through its Training Management System, given by a third party vendor, ACS Learning Services (ACS).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 that controlled by the franchisor. Franchisees will be granted a non-exclusive, geographic Area of Responsibility in which the franchisee will operate the Hertz Business. The Area of Responsibility varies from franchisee to franchisee, and will be identified by the name of a city or other political subdivision(s). Obligations and Restrictions: Franchisees must devote a significant amount of personal time, energy and direction, and their best efforts to developing, conducting, maintaining and operating the Hertz 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 Hertz Business; and (iv) devote full time to the management and operation of the Hertz Business. An employed manager is not required to have an equity interest in the Licensed 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 Hertz 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 Hertz Business.Term of Agreement and Renewal: The initial franchise term is for five years. The Franchise Agreement may be renewed for three successive periods of five years each, 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: Estimated Initial Investment Name of Fee Low High Initial License Fee $25,000 $55,000 Training Expenses $3,000 $3,000 Passenger Cars $435,000 $11,700,000 Courtesy Vehicles (per location) $55,000 $350,000 Equipment and Supplies $5,000 $20,000 Insurance $40,000 $400,000 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) $564,300 $12,494,000 Other Fees Type of Fee Amount License Fee Airport Rental Locations: 9% of Gross Revenue derived from the Hertz 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.Non-Airport Rental Locations: 7% of Gross Revenue derived from the Hertz Business, subject to a minimum annual amount. Monthly Marketing Fee In an amount to be determined, if a Marketing Fund is established. 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 per passenger car reservation. Rate Management Services Estimated to range from $200 to $4,500 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 reservationHertz Rental Processing Fee2.5% 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 Feesb) 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 $4-$6 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. Renewal Fee $5,000 Transfer Fee $0 to the franchisor’s then-current initial fee (currently, our initial fee is $25,000) 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 FeeCost 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 The above information has been taken from the FDD of Hertz along with other online sources. Year of FDD: 2018Franchise Direct’s Disclaimer

Other Fees
Type of Fee Amount
License Fee

Airport Rental Locations: 9% of Gross Revenue derived from the Hertz 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.

Non-Airport Rental Locations: 7% of Gross Revenue derived from the Hertz Business, subject to a minimum annual amount.

Monthly Marketing Fee In an amount to be determined, if a Marketing Fund is established.
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 per passenger car reservation.
Rate Management Services Estimated to range from $200 to $4,500 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 $4-$6 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.
Renewal Fee $5,000
Transfer Fee $0 to the franchisor’s then-current initial fee (currently, our initial fee is $25,000)
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