What were the 'Restructuring and restructuring related charges' for Dollar Rent A Car in 2022?
Dollar_Rent_A_Car Franchise · 2025 FDDAnswer from 2025 FDD Document
| Year Ended December 31, 2022 | ||||||
|---|---|---|---|---|---|---|
| (In millions) | Americas RAC | International RAC | Total | |||
| Revenues | $ | 7,280 | $ | 1,405 | $ | 8,685 |
| Significant segment expenses: | ||||||
| Direct vehicle and operating | 4,080 | 728 | 4,808 | |||
| Depreciation of revenue earning vehicles and lease charges, net(1) | 553 | 148 | 701 | |||
| Selling, general and administrative | 351 | 180 | 531 | |||
| Other segment items(2) | 4 | (1) | 3 | |||
| Segment profit (loss): Adjusted EBITDA | $ | 2,292 | $ | 350 | $ | 2,642 |
| Corporate(3) | (337) | |||||
| Total Hertz Global and Hertz Adjusted EBITDA | 2,305 | |||||
| Adjustments: | ||||||
| Non-vehicle depreciation and amortization | (142) | |||||
| Non-vehicle debt interest, net | (169) | |||||
| Vehicle debt-related charges(4) | (35) | |||||
| Restructuring and restructuring related charges(5) | (45) |
Source: Item 23 — RECEIPTS (FDD pages 102–301)
What This Means (2025 FDD)
According to Dollar Rent A Car's 2025 Franchise Disclosure Document, the company incurred restructuring and restructuring-related charges of $(45) million in 2022. These charges are related to restructuring actions as defined by U.S. GAAP, and include incremental costs from personnel reductions, litigation, and the closure of underperforming locations. In 2022, these charges were recorded within direct vehicle and operating expenses, as well as selling, general, and administrative expenses.
For a prospective Dollar Rent A Car franchisee, this figure indicates the level of expenses the company faced due to restructuring activities during that year. It is important to note that restructuring charges can vary significantly from year to year, depending on the strategic decisions and economic conditions affecting the company. Franchisees should be aware that such charges can impact the overall financial performance of the company, potentially affecting the resources available for franchisee support and development.
It's also worth noting the accounting treatment of these charges. The FDD states that in 2022, these charges were included in direct vehicle and operating expenses, and selling, general, and administrative expenses. Understanding where these costs are allocated can provide insight into the specific areas of the business that were most affected by the restructuring. A prospective franchisee may want to inquire about the specific nature of these restructuring activities and their potential impact on the franchise system.
While this information provides a snapshot of past financial activity, it is crucial for potential franchisees to conduct thorough due diligence and seek professional financial advice to fully understand the implications of these charges and the overall financial health of Dollar Rent A Car.