What is the general range of lease terms for Dollar Rent A Car's leases?
Dollar_Rent_A_Car Franchise · 2025 FDDAnswer from 2025 FDD Document
The Company's lease terms generally range from one month to thirty-five years and a number of agreements contain escalation clauses, which increase the payment obligation based on a fixed or variable rate and renewal options. The length of renewals vary and may result in different payment terms. Payment terms are based on fixed rates explicit in the lease, including guaranteed minimums and/or variable rates based on:
- Operating expenses, such as common area charges, real estate taxes and insurance;
- A percentage of revenues or sales arising at the relevant premises; and/or
- Periodic inflation adjustments.
The Company recognizes a ROU asset and lease liability in its accompanying consolidated balance sheets for leases with a term greater than twelve months. Options to extend or terminate a lease are included in the Company's ROU asset and lease liability when it is reasonably certain that such options will be exercised. The Company does not recognize ROU assets or lease liabilities for short-term leases (i.e., those with a term of twelve months or less) and recognizes lease expense on a straight-line basis over the lease term, as applicable.
Source: Item 23 — RECEIPTS (FDD pages 102–301)
What This Means (2025 FDD)
According to Dollar Rent A Car's 2025 Franchise Disclosure Document, the company, as a lessee, enters into various operating leases. These leases include concession agreements for operating at airports, hotels, and train stations, real estate leases for off-airport locations, revenue-earning vehicle leases, and other equipment leases.
The lease terms for Dollar Rent A Car generally range from one month to thirty-five years. Many of these agreements include escalation clauses that can increase payment obligations based on fixed or variable rates, as well as renewal options that may result in different payment terms. Payment terms are typically based on fixed rates or variable rates tied to operating expenses, a percentage of revenues, or periodic inflation adjustments.
For leases with a term greater than twelve months, Dollar Rent A Car recognizes a right-of-use (ROU) asset and lease liability on its consolidated balance sheets. Options to extend or terminate a lease are included in these calculations when it is reasonably certain that such options will be exercised. Short-term leases, defined as those with a term of twelve months or less, do not result in the recognition of ROU assets or lease liabilities; instead, lease expenses are recognized on a straight-line basis over the lease term.