Can Dollar Rent A Car increase the amount of the security deposit?
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 franchisees to post a security deposit. This deposit can be in the form of cash, a non-revocable letter of credit, or another form of security acceptable to them. The security 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 otherwise.
The 2025 FDD states that Dollar Rent A Car has the discretion to determine the initial amount of the security deposit. Moreover, Dollar Rent A Car retains the right to increase the amount of the security deposit over time. This increase can be based on changes in the franchisee's revenues, financial condition, or the financial condition 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 obligated to restore the security 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 stability and adhering to the terms of the agreement to avoid potential penalties or termination.