Are the owners of a Dollar Rent A Car franchise required to execute a non-compete agreement?

According to the 2025 Dollar Rent A Car Franchise Disclosure Document, owners are required to sign a non-compete agreement. Specifically, the FDD states, "Your Owners shall execute a non-compete agreement in a form and manner approved by Us." This agreement is designed to protect Dollar Rent A Car's interests by preventing owners from engaging in competitive activities that could harm the franchise.

The non-compete agreement applies both during the term of the Franchise Agreement and for a period after the agreement terminates or expires. During the term, owners are prohibited from directly or indirectly owning, engaging in, or having any interest in another vehicle rental business, except under license from Dollar Rent A Car. They are also barred from diverting or attempting to divert any business or customers to a competitor.

Post-termination, the non-compete extends for twelve months after a permitted transfer, termination, or expiration of the Franchise Agreement, or the date the owner ceases to be an owner in the franchisee, whichever is later. During this period, the owner cannot engage in any vehicle rental business, except under license from Dollar Rent A Car. This restriction ensures that former owners do not use the knowledge and experience gained while operating a Dollar Rent A Car franchise to compete against the brand shortly after leaving the system.

The franchisor requires this agreement to protect their confidential information, customer relationships, and overall market position. Prospective franchisees should carefully review the terms of the non-compete agreement with legal counsel to understand the full scope of these restrictions and their implications for future business activities.