How does Dollar Rent A Car recognize lease expenses for short-term leases?

According to Dollar Rent A Car's 2025 Franchise Disclosure Document, the company does not recognize right-of-use (ROU) assets or lease liabilities for leases with a term of twelve months or less, which are considered short-term leases. Instead, Dollar Rent A Car recognizes lease expenses for these short-term leases on a straight-line basis over the lease term.

For a prospective franchisee, this means that if they enter into a lease agreement for a property or equipment with a term of one year or less, Dollar Rent A Car will not record an asset or liability on its balance sheet related to that lease. Rather, the expense will be recognized evenly over the duration of the lease. This accounting treatment simplifies the financial reporting for short-term leases.

This approach is consistent with accounting standards that allow for a practical exception for short-term leases, as the impact on the financial statements is generally not material. This can be beneficial for franchisees as it reduces the complexity of lease accounting and may result in a more predictable expense recognition pattern for these types of leases.