When are payments due from customers of Dollar Rent A Car, and what is the exception to this?
Dollar_Rent_A_Car Franchise · 2025 FDDAnswer from 2025 FDD Document
Payments are due from customers at the completion of the rental, except for customers with negotiated payment terms, generally net 30 days or less, which are invoiced and remain as accounts receivable until collected.
Source: Item 23 — RECEIPTS (FDD pages 102–301)
What This Means (2025 FDD)
According to Dollar Rent A Car's 2025 Franchise Disclosure Document, payments from customers are generally due at the completion of the rental. This is a standard practice in the short-term vehicle rental industry, ensuring immediate revenue collection upon service delivery.
However, there is an exception to this rule. Customers with negotiated payment terms, typically those with commercial contracts, may have payment terms of net 30 days or less. This means these customers are invoiced and their payments are due within 30 days of the invoice date. These outstanding invoices are then classified as accounts receivable until the payments are collected.
For a prospective Dollar Rent A Car franchisee, this means managing two different payment collection processes: immediate payments from most customers and invoiced payments from contracted business clients. Efficient invoicing and accounts receivable management will be crucial for maintaining healthy cash flow when dealing with customers who have negotiated payment terms.