factual

What sections of the Dollar Rent A Car franchise agreement are related to unfair competition?

Dollar_Rent_A_Car Franchise · 2025 FDD

Answer from 2025 FDD Document

    1. In-Term Non-Compete. During the term of this Agreement, Owner shall not, directly or indirectly, for Owner's own or others' benefit, alone, or in conjunction with any other person or entity: (1) own, engage in, be employed by, advise, assist, lease or sublease to, invest in, franchise, lend money to, agree to sell or sell all or substantially all of Owner's interest in the assets of the [Hertz / Dollar / Thrifty] Business, or have any interest in, whether financial or otherwise, any other Vehicle Rental Business, except under license from Franchisor or its affiliates, or (2) divert or attempt to divert any actual or prospective business or customer of the [Hertz / Dollar / Thrifty] Business, or of any other [Hertz / Dollar / Thrifty] Business, to any competitor, by direct or indirect inducement or otherwise.
    1. Post-Term Non-Compete. For a period of twelve (12) months after (i) a Transfer permitted by Section 21 of the Franchise Agreement, or (ii) the date of termination or expiration of the Franchise Agreement for any reason (including, without limitation, due to nonrenewal) or the date on which Owner ceases to be an Owner in Franchisee, whichever is later, Owner shall not directly or indirectly, for Owner or for any other person or entity, alone or through or on behalf of others:

Own, engage in, be employed by, advise, assist, lease or sublease to, invest in, franchise, lend money to, agree to sell or sell all or substantially all of Owner's interest in the assets of the [Hertz / Dollar / Thrifty] Business to, or have any other interest in, whether financial or otherwise, any Vehicle Rental Business, except under license from Franchisor or its affiliates:

ATTACHMENT F TO FRANCHISE AGREEMENT FORM OF CONFIDENTIALITY AND NON-COMPETITION AGREEMENT (OWNERS)

CONFIDENTIALITY AND NON-COMPETITION AGREEMENT

(Owners)

THIS CONFIDENTIALITY AND NON-COMPETITION AGREEMENT (this "Agreement") is entered into on [DATE] (the "Effective Date"), by and between [HERTZ SYSTEM, INC. / DOLLAR RENT A CAR, INC. / THRIFTY RENT-A-CAR SYSTEM, LLC], a [Delaware/Oklahoma] [corporation / limited liability company] with its principal place of business at 8501 Williams Road, Estero, Florida 33928 (the "Franchisor") and, [FRANCHISEE], a [state of organization] [corporation / limited liability company / limited partnership] with its principal place of business at [Franchisee address] (the "Franchisee") and [Owner name], a person having a direct or indirect legal or beneficial interest in Franchisee, whose address is [Owner Address] ("Owner"). All capitalized terms not otherwise defined in this Agreement shall have the meaning ascribed to such terms in the Franchise Agreement.

    1. The North Dakota Securities Commissioner has held the following to be unfair, unjust, or inequitable to North Dakota franchisees (Section 51-19-09, N.D.C.C.):
    • A. Restrictive Covenants: Franchise Disclosure Documents which disclose the existence of covenants restricting competition contrary to Section 9-08-06, N.D.C.C., without further disclosing that such covenants will be subject to this statute.
  • 3.2. Competition.

Provided You are in full compliance with and not in default of this Agreement, We shall refrain from operating or granting a right to any third party to operate a Franchised Business from a location within Your Franchised Territory.

Notwithstanding anything to the contrary contained herein, absent Us requiring or permitting You to participate in any of the following businesses, You shall not have the right to utilize the Marks, or the Franchised System in connection with (i) the sale, or offer for sale, of any vehicle, including the sale of Your rental fleet Vehicles, including sales of Vehicles at auction, retail or wholesale sales, sales through the Internet, donations or the operation of a facility for vehicle sales (a "Car Sales Business"); (ii) the leasing of vehicles under any lease agreements for more than 365 days (a "Vehicle Leasing Business"); and (iii) the rental of vehicles in connection with or through any self-service program, 24/7 program, car-sharing service, ridesharing service, or any other business model for loaning, sharing, renting, or leasing vehicles other than a Vehicle Rental Business (a "Car Self-Service/Sharing Business") without an express

Source: Item 23 — RECEIPTS (FDD pages 102–301)

What This Means (2025 FDD)

The 2025 Dollar Rent A Car Franchise Disclosure Document (FDD) includes several sections addressing unfair competition. Attachment F to the Franchise Agreement outlines a Confidentiality and Non-Competition Agreement that applies to owners. This agreement defines confidential information and sets forth obligations to protect it. Furthermore, the addendum for North Dakota franchisees specifically mentions that restrictive covenants that limit competition are subject to North Dakota state law.

The Non-Competition section of the agreement details restrictions during the term of the agreement, preventing owners from engaging in or having an interest in any other Vehicle Rental Business (except under license from Dollar Rent A Car) or diverting business to competitors. Post-term, for twelve months after a transfer or termination of the franchise agreement, owners are restricted from involvement in any Vehicle Rental Business, with similar exceptions.

Additionally, the FDD addresses Dollar Rent A Car's obligations to refrain from operating or granting rights to others to operate a franchised business within the franchisee's territory, provided the franchisee is in full compliance with the agreement. However, Dollar Rent A Car retains rights not expressly granted to the franchisee and the franchisee is restricted from utilizing the marks or franchised system in connection with car sales, vehicle leasing (over 365 days), or car self-service/sharing businesses without express consent from Dollar Rent A Car.

Disclaimer: This information is extracted from the 2025 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.