HERTZ SYSTEM

Hertz's origins trace back to 1918 when Walter L. Jacobs, a 22-year-old entrepreneur, founded Rent-a-Car Inc. in Chicago, Illinois. He commenced operations with a modest fleet of just 12 Model T Ford cars, establishing the foundational principles of what would become a global car rental empire. By 1923, Jacobs had significantly expanded his enterprise, growing his fleet to 600 vehicles and achieving an impressive approximately $1 million in annual revenue. This rapid early success attracted the attention of John D. Hertz, a prominent figure known for his leadership of Yellow Cab and Yellow Truck. Later in 1923, John D. Hertz acquired the burgeoning company and subsequently rebranded it as the Hertz Drive-Ur-Self System. Walter L. Jacobs, the visionary founder, continued to play a pivotal role, serving as president and chief operating officer until his retirement in 1961, ensuring continuity and experienced leadership during critical growth phases. The company is presently headquartered in Estero, Florida, anchoring its operations in a strategic location. The franchisor entity is Hertz System, Inc., which operates as a wholly-owned subsidiary of The Hertz Corporation. The ultimate parent company overseeing these operations is Hertz Global Holdings, Inc., a publicly traded entity listed on the Nasdaq Stock Market under the ticker symbol HTZ, signifying its substantial market presence and corporate structure. As of February 26, 2026, Gil West assumed the role of Chief Executive Officer (CEO) of Hertz, bringing new leadership to guide the company's future direction. The Hertz System franchise began its expansion through franchising in 1925, extending its reach both domestically and across international borders. Hertz Global Holdings operates through its highly recognized Hertz, Dollar, and Thrifty brands, creating a diversified portfolio within the car rental industry. As of 2025, Hertz commanded a formidable network of 3,485 total units worldwide, with 400 of these being franchised-owned and a significant 3,085 operating as company-owned locations. This extensive global footprint spans across 160 countries, underscoring the pervasive market penetration and brand recognition that benefits every Hertz System franchise. The company's diversified revenue streams, encompassing rental fees, a variety of ancillary services such as GPS, insurance, and vehicle upgrades, as well as fleet management and used vehicle sales, position it strategically in the global market. These diverse offerings contribute to a robust economic model, supporting the stability and growth potential for a Hertz System franchise. Key strategic objectives, including substantial investments in technology, an unwavering focus on enhancing customer experience, and the continuous diversification of product offerings, are designed to further solidify Hertz's market leadership. The current initiative to add new franchisees in the U.S. and Canada for a limited time, coupled with the strategic transition of select corporate markets to franchisee operations, reflects a proactive approach to accelerate growth and strengthen the network for the Hertz System franchise.

The global car rental market was forecasted to achieve a substantial valuation of $58.34 billion by 2022, a testament to the persistent and growing demand for flexible transportation solutions. This impressive growth trajectory is fundamentally propelled by increasing travel and mobility needs across both leisure and business segments, creating a fertile environment for the expansion of car rental services. Consumer trends within this dynamic industry indicate a discernible shift towards more convenient and flexible transportation options, including subscription-based services that appeal to customers by mitigating the burdens of maintenance and insurance premium costs often associated with vehicle ownership. Beyond traditional consumer rentals, the car rental industry is actively cultivating new business-to-business (B2B) opportunities, particularly capitalizing on the surging demand within the last-mile deliveries segment. Hertz has strategically engaged with this trend by forging partnerships with nearly 650 delivery service providers (DSPs), which in turn cater to a vast network of retailers, "e-tailers," and ultimately, end-market consumers, thereby diversifying its revenue streams and market reach. The company's consistent investment in advanced digital platforms and the cultivation of strategic partnerships are critical factors supporting sustained expansion amidst continuously evolving customer preferences and technological advancements. A significant aspect of Hertz's forward-looking strategy involves integrating more sustainable practices, notably through the expansion of its electric and hybrid vehicle fleet. However, in a strategic pivot announced in January 2024, Hertz revealed plans to divest approximately 20,000 electric vehicles, representing about one-third of its EV fleet. This calculated shift involves reallocating resources towards Internal Combustion Engine (ICE) and hybrid models, a decision aimed at mitigating damage and repair costs, which had proven higher for EVs, and improving overall depreciation expenses. This adaptive strategy underscores Hertz's commitment to optimizing its fleet management for enhanced operational efficiency and profitability, a crucial consideration for the long-term viability of a Hertz System franchise. The car rental industry remains highly responsive to changing consumer demands and embraces technological innovation, making Hertz's proactive adjustments vital for maintaining its competitive edge. The company's ability to scale premium and specialty vehicle trims, commercial vans, light trucks, and introduce subscription-like monthly rentals further exemplifies its strategic flexibility and commitment to diversifying offerings to meet varied market needs, all of which contribute to the resilience and growth potential of the Hertz System franchise.

The initial financial commitment for a Hertz System franchise begins with an initial franchise fee that ranges from $25,000 to $125,000. This initial license fee is not static and is carefully determined by a confluence of factors, including the potential car fleet size pertinent to the proposed location, the demographic and economic growth potential of the area population, the presence of existing and planned hotel accommodations, the volume of existing Hertz national account customers within the territory, and the local airport passenger traffic, which is a key indicator of rental demand. While one source indicates a range of $25,000 to $55,000, the broader range of $25,000 to $125,000 is also cited, reflecting the variability based on the specific market opportunity. The total initial investment required to establish and operate a Hertz System franchise spans a significant range, from $879,000 to $15,874,000. Another comprehensive source provides a slightly different yet largely consistent range of $564,300 to $15,874,000, underscoring the substantial capital required. A historical reference from a 2013 FDD cites a range of $318,295 to $4,059,000, illustrating how investment requirements have evolved with market conditions and operational scale. The total estimated investment, meticulously detailed and excluding real estate and improvements, is quantified between $879,300 and $15,839,000. A detailed breakdown of these investment costs provides clarity on the allocation of capital. The Initial Franchise Fee itself contributes $25,000 to $125,000. Training Expenses are a comparatively modest $3,000. A substantial portion of the investment is allocated to Passenger Cars, ranging from $750,000 to $15,000,000, reflecting the core asset of the business. Courtesy Vehicles require an investment of $55,000 to $350,000 per location. Equipment and Supplies are estimated at $5,000 to $25,000, while Insurance costs range from $5,000 to $45,000. Professional Fees are projected between $3,000 and $10,000. The Computer System, including both hardware and software, represents a significant cost, from $11,500 to $250,000, highlighting the technological sophistication required. Optional Software adds $1,500 to $15,000. Business License fees are nominal, ranging from $100 to $500, and Miscellaneous Installation Fees are between $200 and $500. Additionally, franchisees are advised to secure Additional Funds for the first three months of operation, estimated at $20,000 to $50,000, to ensure smooth cash flow during the initial ramp-up phase. The ongoing royalty fee for a Hertz System franchise is structured as 6% to 9% of revenue. Other sources further specify this as 7% to 9% of revenue or an explicit 8% of monthly sales, providing a clear understanding of the recurring financial obligation. Regarding the advertising fund, one source indicates "n.a." for a national brand fund fee; however, marketing fees can indeed vary, with some agreements stipulating an advertising fee of up to 2%, underscoring the importance of brand promotion. To qualify for a Hertz System franchise, prospective franchisees are required to demonstrate a net worth of at least $500,000 and possess liquid capital of $150,000 or more. These stringent financial requirements are a direct reflection of the capital-intensive nature inherent in the car rental business, ensuring that franchisees are adequately resourced to manage a substantial fleet and operational infrastructure.

Hertz provides a comprehensive and meticulously structured training and support program designed to equip its franchisees with all the necessary tools and knowledge for successful operation. The cornerstone of this preparatory phase is the mandatory Initial Training Program, which is a prerequisite for the opening of any new Hertz System franchise. This intensive program covers a broad spectrum of essential topics, including detailed pre-opening procedures, comprehensive fleet programs management, adherence to privacy policy guidelines, facility operational standards, effective marketing strategies, sophisticated revenue management techniques, and a thorough understanding of daily operating procedures. The training sessions are strategically conducted at the franchisor's headquarters or other specially designated locations, ensuring a consistent and high-quality learning environment. The program incorporates both classroom instruction, providing theoretical knowledge and strategic insights, and practical on-the-job training, allowing participants to gain hands-on experience in a real-world setting. It is a strict requirement that franchisees themselves, their designated managers, and other key employees complete these initial training courses to ensure a unified standard of operation across the network. Furthermore, Hertz retains the right to mandate remedial programs if improvements in business operations are deemed necessary, emphasizing continuous learning and operational excellence. Franchisees are responsible for their own travel and accommodation expenses incurred during the training period, a standard practice in franchise agreements. The robust support structure extends far beyond initial training, offering ongoing guidance on critical aspects such as optimal site selection, skilled lease negotiation, continuous operational training updates, and dynamic marketing strategies tailored to local markets. Crucially, franchisees gain invaluable access to Hertz's global brand recognition and its sophisticated, integrated reservation systems, which are instrumental in driving customer traffic and streamlining bookings. The franchise model significantly benefits from Hertz's extensive network of strategic partnerships, including long-standing relationships with major vehicle manufacturers, prominent airlines, and leading travel agencies, all of which substantially enhance customer reach and improve operational efficiency. Franchisees also capitalize on shared services and achieve significant cost synergies, particularly through the company's formidable fleet purchasing scale, which provides access to vehicles at competitive prices, and its advanced reservation systems, which optimize vehicle utilization. In terms of daily operations, Hertz expects franchisees to dedicate substantial time, energy, effort, and strategic direction to their business. While direct franchisee involvement is encouraged, there is also the flexibility for franchisees to hire a qualified manager who will complete all required training and dedicate their full time and energy to the daily operations, ensuring professional management. Location owners are explicitly required to hold a comprehensive training program for their employees, orienting them thoroughly on Hertz's rigorous standards and detailed procedures. A fundamental operational requirement for a Hertz System franchise is that franchisees must exclusively rent out vehicles that strictly adhere to Hertz's precise specifications regarding type, quality, fuel source, size, model year, mileage, and brand, ensuring a consistent high-quality experience for customers. For corporate markets that are transitioning to franchisee operations, a unique opportunity exists where franchisees will have the chance to acquire established assets such as facilities, existing staff, and the current fleet, and seamlessly operate under pre-existing Hertz airport concession agreements and functional operational frameworks, offering a smoother transition into an already operational business.

The Franchise Disclosure Document (FDD) for Hertz from 2026 indicates that specific revenue figures per unit, often referred to as Average Unit Volume (AUV), are "Undisclosed". Similarly, detailed profit figures for individual franchise units are generally not disclosed in FDD summaries, aligning with industry practices where such sensitive financial performance representations are often optional. Item 19 of the FDD, which pertains to Financial Performance Representations (FPRs), is an optional section, and while it can provide some financial data, it might only present gross revenue figures without revealing net profit, as profitability is subject to a multitude of localized and operational variables. Franchise profits are intricately dependent on various factors that fluctuate by location, including local market demand, prevailing labor costs, and commercial lease rates, making a standardized profit disclosure challenging. However, to provide a broader financial context for the overarching enterprise, Hertz Global Holdings Inc. reported a significant full-year 2025 revenue totaling $8.5 billion. The company further anticipates achieving an impressive total revenue of $10 billion USD for the full year 2025, a projection underpinned by strategic investments in cutting-edge technology, a relentless focus on enhanced customer experience, and the continuous diversification of its product offerings, all of which aim to strengthen the core business that supports every Hertz System franchise. The Operating Profit (EBITDA) for full-year 2025 was reported at $(339) million, which, despite being a loss, represented a notable improvement of more than $1 billion year over year, indicating significant progress in operational efficiency and cost management. The Net Loss for full-year 2025 stood at $747 million, with diluted Earnings Per Share (EPS) recorded at $(2.43). While specific financial performance data for individual Hertz System franchise units is not publicly disclosed in the FDD, these comprehensive financial results for the parent company, Hertz Global Holdings Inc., offer a vital perspective on the overall economic health and strategic direction of the brand within which the Hertz System franchise operates. The corporate financial performance, particularly the anticipated revenue growth and operational improvements, reflects the company's commitment to strengthening its market position and fostering a supportive environment for its franchise partners. The strategic decision made in January 2024 to sell off approximately 20,000 electric vehicles and pivot towards a greater emphasis on Internal Combustion Engine (ICE) and hybrid models was a direct response to operational challenges, aiming to lower damage and repair costs, which had been higher for EVs, and to improve depreciation figures. This tactical adjustment highlights Hertz's proactive management of its fleet and its dedication to optimizing financial outcomes, which ultimately benefits the entire network, including the Hertz System franchise. The diversified revenue streams, encompassing not only direct rental fees but also ancillary services, fleet management, and the strategic sale of used vehicles, are crucial components of the company's robust financial model, providing multiple avenues for profitability and resilience. These overarching financial strategies and the parent company's performance provide an essential backdrop against which potential investors can evaluate the broader market context for a Hertz System franchise.

Hertz began its extensive franchising journey in 1925, systematically expanding its reach across both domestic and international markets. The growth trajectory for franchised units demonstrates a consistent expansion, with 301 franchised Hertz locations recorded in the USA as of 2013. This number increased to 330 franchised units by 2015, showcasing steady growth. While there was a slight dip to 301 franchised units in 2018, the network rebounded strongly, reaching 400 franchised units by 2025, indicating renewed focus and success in franchise development. As of 2025, Hertz Global Holdings operates a formidable network of 3,485 locations worldwide, encompassing both company-owned and franchise-operated branches, spanning an impressive 160 countries. In the United States alone, Hertz maintains a pervasive presence with 2,719 locations spread throughout 52 states and territories as of 2025, illustrating deep market penetration. Globally, Hertz operates in over 140 countries, with another source stating over 9,000 locations in 145 countries worldwide, further solidifying its extensive international footprint. Currently, Hertz is actively adding new franchisees in the U.S. and Canada for a limited time, a significant strategic initiative after many years of primarily focusing on a corporate-owned model. This expansion plan includes the strategic transition of select corporate markets to franchisee operations, a move designed to accelerate growth in key U.S. car rental markets by leveraging local entrepreneurial drive and investment. International expansion is carefully managed, being ROI-driven and franchise-led, with a particular focus on high-traffic inbound corridors such as U.S.–EU and U.S.–LatAm routes. This global growth strategy is intelligently designed to leverage existing tour operator and corporate partnerships, effectively limiting capital intensity for the expansion of the Hertz System franchise. In North America, Hertz is diligently optimizing its operations, prioritizing the rebuilds of airport hubs and expanding its neighborhood locations to restore pre-2023 utilization levels and effectively capture local demand. These strategic initiatives are vital for enhancing market share and operational efficiency across the continent. The competitive advantages inherent in establishing a Hertz System franchise are substantial and multifaceted. They include instant brand recognition, which significantly reduces the initial marketing effort required for a new business, and access to Hertz's extensive support network, providing ongoing operational and strategic guidance. The established reputation for reliability and quality is a powerful asset, complemented by robust marketing resources and cutting-edge technology, including global reservation systems that streamline customer bookings. Furthermore, franchisees benefit from Hertz's substantial fleet purchasing scale, enabling cost-effective acquisition of a diverse range of vehicles, and its strategic partnerships with major vehicle manufacturers, airlines, and travel agencies, which enhance customer reach and operational efficiency. The diversified product offerings, such as the Hertz Gold Plus Rewards® program, NeverLost® onboard navigation systems, and specialty vehicle collections including the Prestige, Fun, and Green Collections, along with Sirius XM Satellite Radio, provide a compelling value proposition to customers. Hertz's strategic initiatives, including scaling premium and specialty trims, commercial vans and light trucks, and introducing subscription-like monthly rentals, further strengthen its competitive position and provide diverse revenue opportunities for the Hertz System franchise.

The ideal candidate for a Hertz System franchise is expected to meet stringent financial criteria, reflecting the significant capital requirements of the car rental business. Prospective franchisees must possess a net worth of at least $500,000 and demonstrate liquid capital of $150,000 or more, ensuring they have the necessary financial stability and resources to manage a substantial fleet and operational infrastructure. Beyond financial capacity, Hertz seeks individuals who are prepared to devote considerable time, energy, effort, and strategic direction to the business, underscoring the hands-on commitment required for success. Franchisees have the flexibility to hire a dedicated manager who will complete all required training and commit their full time and energy to the operations, providing a pathway for those who may not be able to be on-site constantly but can oversee strategic direction. Both franchisees, their designated managers, and key employees are mandated to complete comprehensive initial training courses to ensure adherence to Hertz’s high operational standards. Furthermore, location owners are responsible for conducting internal training programs for their employees, orienting them thoroughly on Hertz's specific standards and procedures. A critical aspect for potential franchisees to understand is that Hertz does not provide exclusive territory protection. Franchisees are granted a non-exclusive geographical territory explicitly identified in their franchise agreement. This means that a Hertz System franchise may encounter competition from other franchisees operating under the Hertz brand, from company-operated outlets, or from other distribution channels authorized by Hertz within their designated territory. This necessitates a proactive and competitive approach to market penetration and customer retention. For corporate markets that are undergoing a transition to franchisee operations, a unique and attractive opportunity arises for the ideal candidate. These franchisees will have the distinct advantage of being able to acquire existing assets, including established facilities, experienced staff, and the current fleet of vehicles. Moreover, they will operate under pre-existing Hertz airport concession agreements and functional operational frameworks, providing a streamlined entry into an already operational and proven market. The ideal Hertz System franchise owner, therefore, is not only financially capable but also understands the capital-intensive nature of the business, is prepared for either direct, hands-on involvement or to employ a dedicated and fully trained manager, and possesses the strategic acumen to thrive in a competitive landscape without exclusive territorial guarantees.

Investing in a Hertz System franchise represents a compelling opportunity to align with a globally recognized brand, benefiting from its extensive operational history and market leadership. This venture is backed by its robust parent company, Hertz Global Holdings, Inc., which reported a substantial full-year 2025 revenue of $8.5 billion and anticipates reaching an even more impressive $10 billion USD for 2025, reflecting a strong and growing corporate foundation. The Hertz System franchise benefits from a pervasive international presence, with 3,485 locations spanning across 160 countries as of 2025, ensuring widespread brand visibility and customer recognition. Strategic expansion plans are currently underway, including actively adding new franchisees in the U.S. and Canada and a targeted initiative to transition select corporate markets to franchise operations, signaling a period of accelerated growth and enhanced market penetration. The broader car rental industry is poised for continued expansion, having been projected to reach $58.34 billion by 2022, primarily driven by increasing global travel and evolving mobility needs, providing a fertile ground for a Hertz System franchise to flourish. Hertz consistently adapts to emerging consumer trends, notably capitalizing on new business-to-business (B2B) opportunities such as last-mile deliveries, exemplified by its strategic partnerships with nearly 650 delivery service providers. The company's adaptive leadership is further demonstrated by its strategic shift in January 2024 concerning its electric vehicle fleet, where plans were announced to