A Hertz franchise operates a Vehicle Rental Business: the franchisee supplies and maintains the rental fleet, staff and local execution, while Hertz System, Inc. controls the brand rules, Reservations System, required programs, technology standards, data access and many customer-facing policies. The territory is geographic but expressly non-exclusive.
How does a Hertz franchise work after opening?
The franchisee runs the local car-rental operation and carries the fleet, location, manager, employees and customer execution. Hertz routes and governs demand through its Reservations System and programs, prescribes fleet and counter-system standards, controls the authorized website and brand rules, and can retrieve operating data continuously.
What does the franchisee sell, and who buys it?
The base franchise sells vehicle rentals under the Hertz Marks from approved Locations inside the Franchised Territory. The standard agreement does not restrict the classes of customers the franchisee may serve, but it does restrict what the business may sell and how Hertz-branded demand is handled.
Item 16 permits passenger-oriented rental vehicles, including SUVs, passenger vans and smaller-than-medium-duty pickups, subject to Hertz standards. Without specific permission, the Franchise Agreement does not authorize vehicle sales, leasing, self-service/car-sharing or vehicles primarily designed to carry property or goods.
Demand enters through the Reservations System, telephone, Internet, travel agents, GDS and Hertz programs. Official GDS tools identify Amadeus, Galileo by Travelport, SABRE and Worldspan. Hertz Business Rewards documents business bookings through web, phone and travel agents; the Insurance Replacement program documents insurer-referred and direct-bill rentals.
A signed Used Vehicle Sales Addendum can permit used-vehicle sales at an approved rental Location, but sales cannot predominate. A Multiple Brand Franchising Addendum can add Dollar and/or Thrifty; absent written permission, customer-facing counters, branding, telephone lines, buses, uniforms and simultaneous counter staffing stay brand-specific.
Sources: Hertz System, Inc. FDD (2026), Item 1, pp. 1-1 and 1-4–1-5; Item 16, pp. 16-1–16-2; Used Vehicle Sales Addendum; Multiple Brand Franchising Addendum, Sections 6–11.
How does a rental move through the unit?
The operating cycle is reservation-led but still requires local fleet execution. Hertz transmits demand and program rules; the franchisee keeps availability, rates, vehicles and counter processing aligned so the assigned reservation can become a completed rental and a recorded, reportable transaction.
Reservation enters the system
- Actor
- Hertz / affiliate systems; franchisee.
- Action
- Receive and accept reservations from authorized channels and other Hertz locations.
- System / asset
- Reservations System, website, telephone, GDS and approved programs.
- Output
- A reservation assigned to a Location for service.
Availability and fleet are matched
- Actor
- Franchisee, manager and rental staff.
- Action
- Maintain accurate rate and availability data and a ready-to-rent fleet that meets Hertz standards.
- System / asset
- Approved Counter System and compliant rental vehicles.
- Output
- Vehicle category and transaction data ready for pickup.
Customer qualifies and rental opens
- Actor
- Counter employee or other trained unit staff.
- Action
- Apply Hertz rental qualifications, required payment rules and the standard rental-agreement process.
- System / asset
- Approved Counter System, Hertz System Standard Rental Agreement and designated payment methods.
- Output
- An active rental under the authorized terms and programs.
Rental is serviced in-network
- Actor
- Franchisee and participating Hertz locations.
- Action
- Follow one-way, intercity, roadside, exchange, referral and other applicable Operations Guide procedures.
- System / asset
- Operations Guide, rental fleet and Hertz network procedures.
- Output
- Rental continues, transfers or routes to the appropriate Hertz business.
Return closes the rental record
- Actor
- Franchisee rental staff.
- Action
- Close the rental, record final transaction data and return the vehicle to compliant operating status.
- System / asset
- Approved Counter System, vehicle-control and maintenance procedures.
- Output
- Closed rental agreement plus updated fleet status.
Data, billing and audit trail flow upstream
- Actor
- Franchisee; Hertz System, Inc.; The Hertz Corporation where applicable.
- Action
- Transmit operating records, process required centralized billing and retain records for reporting and audit.
- System / asset
- Computer System, electronic polling, financial and operating reports.
- Output
- Recorded transaction, settlement path and auditable operating data.
Sources: Hertz System, Inc. FDD (2026), Item 11, pp. 11-4–11-7; Item 16, pp. 16-1–16-2; Franchise Agreement Sections 10.1–10.2, 12.4, 14.1–14.4 and 15.1. Consumer qualification context: Hertz Rental Qualifications and Requirements.
Can a Hertz franchise be manager-run?
A full-time manager may run day-to-day operations, but that does not remove the owner's contractual participation duty. Item 15 requires the owner to devote significant personal time, energy, direction and best efforts to developing, conducting, managing and operating the Franchised Business.
The owner may serve as manager or employ one. The manager must be disclosed to Hertz, complete required training, have sufficient Vehicle Rental Business experience and devote full time to management and operation. An employed manager does not need an equity interest. The FDD therefore supports a manager-run structure, not an absentee-operation claim.
The FDD does not prescribe a unit headcount. It does disclose functions that must be covered: daily operating procedures, counter policies, fleet operations, customer service and sales, accident reporting and back-office work. The franchisee must implement employee training to Hertz's then-current standards and procedures; in a multiple-brand operation, customer-contact staffing must also follow the separate-brand rules.
Sources: Hertz System, Inc. FDD (2026), Item 15, p. 15-1; Item 11, pp. 11-7–11-8; Franchise Agreement Section 12.2.
Which systems, assets and suppliers are mandatory?
The operating stack is tightly specified even where supplier choice exists. The franchisee must maintain a compliant fleet, Computer System, Approved Counter System, standard rental agreements, payment-card security and other items to Hertz specifications; Hertz can revise specifications and approved-supplier lists.
Item 8 caps rental vehicles at 24 months after first road use and currently at 40,000 miles. Attachment D sets the minimum fleet; no maximum is disclosed. Hertz currently requires neither a particular make/model nor a particular vehicle supplier and may offer an OEM Vehicle Purchase Program.
The Computer System must include an Approved Counter System; Item 8 identifies six approved counter-automation suppliers as of the FDD date. The system handles rental agreements, payments, reports, vehicle readiness, customer profiles and rate/rental data. Hertz can require upgrades, electronically poll closed rentals and retrieve required transaction, vehicle, reservation, customer-profile and general-ledger data 24/7. A PCI-compliant security service is mandatory.
Franchisee
- Keeps the local fleet compliant and ready to rent.
- Employs and supervises the manager and staff.
- Maintains rate, availability, transaction and financial records.
- Uses approved suppliers or seeks approval for alternatives.
Hertz System, Inc. / Parent support
- Maintains the Reservations System and controls the authorized Hertz Website.
- Sets Operations Guide, fleet, technology, advertising and program requirements.
- Approves suppliers and systems and may alter specifications.
- Receives data and may inspect or audit records.
Required or linked third parties
- Approved Counter System providers supply counter automation and support.
- Payment-card issuers and PCI-compliant vendors support payment and security.
- Travel agents, GDS providers, insurers and business accounts originate demand.
- OEMs may supply fleet through the Vehicle Purchase Program.
Sources: Hertz System, Inc. FDD (2026), Item 8, pp. 8-1, 8-4–8-6; Item 11, pp. 11-4–11-6; Franchise Agreement Sections 12.18–12.21, 14 and 15.
What does Hertz control, and what remains with the franchisee?
The franchisee controls local execution inside a constrained operating envelope. Hertz controls brand presentation, Reservations System participation, programs, data, required systems, supplier approval and parts of pricing policy; the franchisee retains employment, fleet-sizing above the minimum and permitted sourcing decisions.
| Operating decision | Hertz control | Franchisee discretion |
|---|---|---|
| Territory / channels | Franchised Territory is non-exclusive; Hertz may use Internet and other channels inside it. | May accept outside-territory reservations, but cannot solicit outside the Territory without permission. |
| Fleet | Sets minimum fleet and age/mileage/specification standards. | No maximum fleet; currently no required make/model or vehicle supplier. |
| Pricing | May advertise suggested rates and, where lawful, prescribe certain maximum/minimum rate types or levels; corporate programs can carry contracted rates. | Franchisee establishes rates and charges subject to law, Hertz policies, filing and notice requirements. |
| Advertising | Approves media, format, content and the authorized Website; can direct system advertising programs. | May conduct local advertising using approved materials and channels. |
| Staffing | Requires qualified full-time management, training and brand-specific staffing in certain multi-brand customer areas. | Selects employees and staffing levels; no standard headcount is disclosed. |
| Systems / suppliers | Approves systems and suppliers; may require replacements and can designate a sole supplier for an item. | Can request approval of an unapproved supplier where the agreement permits. |
Attachment A defines the Franchised Territory, but it is non-exclusive. Hertz and affiliates may use competing channels and brands, accept Internet reservations in the area and move vehicles into or through the Territory without territorial compensation.
Sources: Hertz System, Inc. FDD (2026), Item 11, pp. 11-2–11-4; Item 12, pp. 12-1–12-2; Franchise Agreement Sections 10, 12.24–12.33 and 13–15.
What does Item 20 show about the Hertz outlet mix?
At the end of 2025, Item 20 reports 2,946 total outlets: 390 franchised and 2,556 Company Owned. The franchised count fell by 10 during 2025, while the Company Owned count fell by 529. Those figures describe system structure, not economics.
Exact outlet counts reported at December 31, 2025.
- 390 · 13.2%Franchised
- 2,556 · 86.8%Company Owned — FDD terminology
Interpretation: Item 20 shows a predominantly Company Owned outlet base at year-end 2025; Item 1 separately states that Hertz System, Inc. itself does not operate the offered business, while its Parent and affiliates operate vehicle-rental businesses.
Source: Hertz System, Inc. FDD (2026), Item 20, Table 1, p. 20-2; Item 1, p. 1-1. Percentages: 390 ÷ 2,946 = 13.2%; 2,556 ÷ 2,946 = 86.8%; total = 100.0% after rounding.
Item 19 contains no financial performance representation for franchised or company-owned outlets. Item 20 should therefore be read as an outlet-population and system-change disclosure, not as evidence of sales, margin, profit or owner earnings.
Which operating details must be verified for a specific Hertz deal?
Decisive operating variables sit in deal-specific documents that Hertz can update. They should be checked against the actual proposed Franchise Agreement and then-current Operations Guide rather than inferred from the systemwide FDD.
- Attachment A: exact Franchised Territory, approved Location or Locations, and any required additional Locations.
- Attachment D: the minimum fleet for the proposed market, plus the current fleet mix and replacement standards.
- Attachment C / Item 15: proposed manager, full-time status, training completion and Vehicle Rental Business experience.
- Current Operations Guide: approved counter automation, hours of operation, one-way/intercity policies, payment rules, loyalty procedures and current operating bulletins.
- Supplier list: current approved suppliers for rental agreements, Computer System software and any item for which Hertz has narrowed or changed sourcing.
- Addenda: whether the deal includes Used Vehicle Sales or Multiple Brand Franchising, because either changes the authorized offering, facilities or staffing model.
Exhibit G’s Operations Guide table of contents covers hours, overdue rentals, recalls, vehicle inventory, PCI DSS, privacy, reservation types, loyalty, damage collection, after-hours returns, payment and driver-license policy.
What is the operating model in one view?
Hertz is a locally executed, centrally governed vehicle-rental franchise: demand enters through Hertz and partner channels; the franchisee supplies the compliant fleet, people and transaction execution.
Central customer mechanism: vehicle rentals arrive through the Reservations System, Hertz channels, travel distribution, business accounts, insurance replacement and local demand, then are fulfilled by the franchise Location.
Franchisee's key operating responsibility: keep fleet, availability, staff, counter processing and records aligned to service reservations under Hertz standards.
Strongest dependency: Hertz controls the Reservations System, Operations Guide, authorized Website, program participation, system specifications and broad data/audit access.
Critical distinction: the Franchised Territory is non-exclusive, and optional Used Vehicle Sales or Multiple Brand rights exist only when the corresponding addendum is granted.
Largest operating question to verify: the proposed deal's Attachment A territory and Locations, Attachment D fleet minimum, and the then-current Operations Guide / Approved Counter System requirements.