What does the Graves Amendment generally eliminate for Dollar Rent A Car franchisees?
Dollar_Rent_A_Car Franchise · 2025 FDDAnswer from 2025 FDD Document
In 2005, the Transportation Equity Act of 2005 was signed into law, which included the "Graves Amendment" (49 U.S.C. §30106). The Graves Amendment generally eliminates the imposition of vicarious liability – as imposed by state law – on the owner of a motor vehicle that rents or leases the vehicle to a person by reason of being the owner of the vehicle (or an affiliate of the owner) for harm to persons or property that results or arises out of the use, operation or possession of the vehicle during the rental or lease period. The pre-conditions for this elimination of vicarious liability are: (1) the owner (or an affiliate) must be engaged in the trade or business of renting or leasing vehicles; and (2) there must be no negligence or criminal wrongdoing on the part of the owner (or an affiliate of the owner).
Source: Item 1 — THE FRANCHISOR AND ANY PARENTS, PREDECESSORS, AND AFFILIATES (FDD pages 9–20)
What This Means (2025 FDD)
According to Dollar Rent A Car's 2025 Franchise Disclosure Document, the Graves Amendment, enacted as part of the Transportation Equity Act of 2005, generally eliminates vicarious liability imposed by state law on vehicle owners who rent or lease vehicles. This protection applies to Dollar Rent A Car franchisees, shielding them from liability for harm to persons or property resulting from the use, operation, or possession of a rented vehicle during the rental or lease period.
However, this elimination of vicarious liability is conditional. To qualify, the Dollar Rent A Car franchisee (or an affiliate) must be engaged in the trade or business of renting or leasing vehicles. Additionally, the franchisee (or an affiliate) must not be negligent or engage in any criminal wrongdoing. If these conditions are met, the Graves Amendment provides a significant legal protection for Dollar Rent A Car franchisees.
In practical terms, this means that if a Dollar Rent A Car vehicle is involved in an accident caused by the renter's negligence, and the franchisee has not been negligent or engaged in any criminal wrongdoing, the franchisee is generally protected from being held liable for damages. This can significantly reduce the risk of large lawsuits and financial losses for Dollar Rent A Car franchisees, making the franchise opportunity more attractive.