Under what conditions can Dollar Rent A Car charge a franchisee for the costs of an audit?
Dollar_Rent_A_Car Franchise · 2025 FDDAnswer from 2025 FDD Document
. You shall at all times maintain and employ such amount and allocation of vehicle financing, net working capital, liquidity and net worth as will enable You to fulfill all of Your responsibilities under this Agreement, as we may determine necessary in Our discretion.
15. AUDIT AND INSPECTION
15.1. Right to Audit. We have the right at any time during reasonable business hours and without prior notice, during the Term and for six (6) years thereafter, to inspect Your Franchised Business, audit Your business methods, business records and computer systems and to take a physical inventory of Your rental fleet and other assets. You shall make space available to Us and Our Affiliate at Your Franchised Business to conduct such inspections and audits. If these inspections
are made necessary by Your failure to comply with this Agreement or any other agreement with Us or Our Affiliates or if You deny Us access to Your Franchised Business or otherwise take action that results in the audit not proceeding satisfactorily, We have the right to charge You for the costs of making inspections, including charges for Our employees' or agents' travel expenses, room, board and compensation, and costs of enforcement of these provisions. The foregoing remedies shall be in addition to any other remedies We may have.
You will provide Us, or Our authorized representative, with full access to Your Franchised Business and will provide all assistance necessary for Us to conduct such audit. We are also entitled to inspect, take copies of, and audit Your books of account and all supporting documentation relating to the Your Franchised Business including records of Vehicles owned, rented, leased, operated, or kept for use in Your Franchised Business and the revenues therefrom for the entire period in which you operated a Franchised Business whether under this Agreement or otherwise..
Such inspection or audit shall be during reasonable business hours and within thirty (30) days of Our request for an audit; provided, however, that if We, in Our sole discretion, deem that a security breach with respect to data has or might have occurred, We may schedule such audit within one (1) day of providing notice. You will provide promptly and fully to Us and/or auditor and/or Our authorized representative all access (including to people), facilities and information requested by Us, Our auditor or authorized representative.
Source: Item 23 — RECEIPTS (FDD pages 102–301)
What This Means (2025 FDD)
According to Dollar Rent A Car's 2025 Franchise Disclosure Document, Dollar Rent A Car has the right to charge a franchisee for audit costs under specific circumstances. If inspections are necessitated by the franchisee's failure to comply with the Franchise Agreement or any other agreement with Dollar Rent A Car or its affiliates, the franchisee may be charged. This also applies if the franchisee denies Dollar Rent A Car access to the franchised business or takes actions that impede the audit's satisfactory progress. These charges can include travel expenses, room and board, compensation for employees or agents, and costs related to enforcing these provisions.
Additionally, Dollar Rent A Car can charge a franchisee for audit costs if the audit reveals non-compliance with any agreement provision or if there are discrepancies in the calculation of payments due. This includes misreporting the number of vehicles owned, rented, leased, operated, or kept for use in the franchised business. If the sums due to Dollar Rent A Car are found to be insufficient by two percent (2%) or more, or if the franchisee denies access to books and records, the franchisee will be responsible for covering all audit costs. These costs encompass travel, lodging, compensation for employees or agents, enforcement costs, and reasonable accounting and legal fees.
These audit-related charges serve as a deterrent against non-compliance and misreporting, ensuring that Dollar Rent A Car franchisees adhere to the terms of their agreements. It is common practice in franchising for franchisors to reserve the right to audit franchisees and to pass on the costs of such audits when discrepancies or non-compliance are discovered. This protects the integrity of the franchise system and ensures accurate financial reporting.