What is the 'Early Termination Fee' for a Dollar Rent A Car franchise, and how is it calculated?
Dollar_Rent_A_Car Franchise · 2025 FDDAnswer from 2025 FDD Document
Pursuant to Section 19.1 of your Franchise Agreement, you may terminate your Franchise Agreement with us, with or without cause, at any time upon giving not less than 180 days' written notice to us.
If you terminate your Franchise Agreement pursuant to Section 19.1 of your Franchise Agreement, you must pay to us, in addition to any other amounts due, as liquidated damages for the future franchise fees we will lose, an "Early Termination Fee" calculated by multiplying the minimum amount per year set forth in Attachment A to your Franchise Agreement (or, if no minimum amount is specified, the average annual franchise fee paid by you to date during the Term) by the number of years remaining on the term of the Franchise Agreement as of the date of termination (adjusted in each case on a pro rata basis for partial years and for partial terminations if applicable).
The Early Termination Fee is due when you provide to us your notice of termination.
The Early Termination Fee is intended to compensate us only for the value lost in future franchise fees pursuant to Section 5.1 of the Franchise Agreement as a result of the early termination of the Franchise Agreement, and you remain liable for all other obligations under the Franchise Agreement, including the "Obligations After Termination or Expiration" as described in Section 19.6 of your Franchise Agreement and liabilities arising out of your breach or default.
Source: Item 6 — OTHER FEES (FDD pages 39–46)
What This Means (2025 FDD)
According to the 2025 Dollar Rent A Car Franchise Disclosure Document, franchisees have the option to terminate their Franchise Agreement, with or without cause, by providing at least 180 days' written notice. However, doing so triggers an 'Early Termination Fee.'
The Early Termination Fee is calculated to compensate Dollar Rent A Car for the future franchise fees they will lose as a result of the early termination. The fee is determined by multiplying the minimum annual amount specified in Attachment A of the Franchise Agreement (or, if no minimum is specified, the average annual franchise fee paid to date) by the number of years remaining on the franchise term as of the termination date. This calculation is adjusted on a pro rata basis for partial years and for partial terminations, if applicable.
The full Early Termination Fee is due when the franchisee submits their termination notice. It's important to note that this fee only covers the lost future franchise fees. The franchisee remains responsible for all other obligations under the Franchise Agreement, including those that persist after termination, as well as any liabilities resulting from breaches or defaults.