If a Dollar Rent A Car franchisee terminates early, what other obligations remain?
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 Dollar Rent A Car's 2025 Franchise Disclosure Document, a franchisee who terminates the Franchise Agreement early is subject to several financial obligations. Specifically, the franchisee must provide Dollar Rent A Car with at least 180 days' written notice of termination. In addition to any other outstanding amounts due, the franchisee must pay an "Early Termination Fee" as liquidated damages for lost future franchise fees. This fee is calculated by multiplying the minimum annual franchise fee (as 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, prorated for partial years or terminations. The Early Termination Fee is due when the termination notice is given.
Even after paying the Early Termination Fee, the Dollar Rent A Car franchisee remains liable for all other obligations under the Franchise Agreement. This includes the "Obligations After Termination or Expiration" as detailed in Section 19.6 of the Franchise Agreement, as well as any liabilities arising from breaches or defaults.
In practical terms, this means that a Dollar Rent A Car franchisee considering early termination needs to carefully calculate the Early Termination Fee and factor in any other outstanding debts or liabilities to Dollar Rent A Car. The franchisee should also review Section 19.6 of the Franchise Agreement to fully understand the post-termination obligations. Failing to meet these obligations could result in further legal and financial repercussions.