What form can the security deposit required by Dollar Rent A Car take?
Dollar_Rent_A_Car Franchise · 2025 FDDAnswer from 2025 FDD Document
We may require you to post a deposit in the form of cash or a non-revocable letter or credit or other form of security acceptable to us, to secure your or any of your affiliates' obligations to us and our affiliates, whether under the Franchise Agreement or otherwise.
The initial amount of such security deposit, if required, will be an amount determined by us in our sole discretion, provided, that we may increase such amount from time to time, in our sole discretion, based upon a change in the revenues or the financial condition of you or any guarantor or Your Franchised Business.
If such security deposit is drawn upon to satisfy any obligation of yours or your affiliates, you will be obligated to reinstate the full amount of such security deposit within five (5) days and failure to do so will be deemed a breach of your Franchise Agreement.
Source: Item 6 — OTHER FEES (FDD pages 39–46)
What This Means (2025 FDD)
According to Dollar Rent A Car's 2025 Franchise Disclosure Document, Dollar Rent A Car may require a security deposit from franchisees. This deposit serves to secure the franchisee's obligations to Dollar Rent A Car and its affiliates, whether these obligations arise from the Franchise Agreement or other agreements.
The security deposit can be in the form of cash, a non-revocable letter of credit, or another form of security that Dollar Rent A Car finds acceptable. The initial amount of the security deposit is determined by Dollar Rent A Car at its discretion and may be increased over time based on changes in the franchisee's revenues or financial condition, or that of any guarantor or the franchised business.
If Dollar Rent A Car draws upon the security deposit to cover any obligations of the franchisee or its affiliates, the franchisee is required to restore the deposit to its full amount within five days. Failure to do so constitutes a breach of the Franchise Agreement. This condition highlights the importance of maintaining sufficient financial resources to promptly replenish the security deposit if it is used by Dollar Rent A Car.