Detailed Information on Avis’ Initial Franchise Fee, Royalty Fee + 20 Other Fees (Items 5 and 6, 2021 FDD)
Fees Under Avis License Agreement
1. Initial License Purchase Fee: $25,000 for a territory with a population of 50,000 people (or under); plus an additional $5,000 for each 5,000 population increment over 50,000 people
- When you sign the Avis License Agreement, you must pay Avis’ fees (the “Initial License Purchase Fee”) based on the population of the territory covered by that agreement. The Initial License Purchase Fees are not uniform.
- Avis calculates the Initial License Purchase Fee as follows: $25,000 for a territory with a population of 50,000 people (or under); plus an additional $5,000 for each 5,000 population increment over 50,000 people.
- Population is determined by using figures reported by the United States Census Bureau and updated regularly by a consulting company.
- Avis reserves the right to waive or charge Initial License Purchase Fees greater or less than that specified above based on a variety of factors, including certain characteristics of your territory (for example, the existence of an airport, resort, large hotel, university, or other prime commercial rental location, whether you are converting an existing business, and the level of competition in your territory).
- Initial License Purchase Fees are not refundable under any circumstances.
2. License Fees: 7.5% of the Gross Revenue of your Avis Franchise for the preceding month
- Due Date: 10th of each month.
3. Minimum License Fee Payment: the amount is based on a calculation factoring in the estimated average revenue per vehicle, the number of vehicles below the minimum required under your Avis License Agreement, and the royalty percentage during the applicable time period
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- Due Date: 60 days after the end of each applicable time period.
- This is payable only if your actual License Fee payments are less than the minimum amounts.
- In determining these minimum amounts, Avis reviews factors like the area of the country in which you are located, your market (e.g., local or airport), and vehicle penetration numbers.
4. Costs for Directory Listings: Avis’ costs and expenses for obtaining and maintaining listings
- Due Date: As incurred.
- Avis may (at its option) obtain “yellow pages” and “white pages” listings identifying your Avis Franchise and charge you for the costs and expenses it incurs.
5. Transfer Fees: the transfer fee will be $2,500 ($5,000 if private stock offering), plus up to $7,500 in out-of-pocket expenses during the review and approval process
- Due Date: $2,500 deposit ($5,000 if private stock offering) when you request approval, remainder upon invoice from Avis for additional out-of-pocket expenses.
- No transfer fee is due, and Avis will refund any paid deposit, if transfer (other than stock offering) is not completed because Avis fails to approve it.
- You are responsible for the payment of all your out-of-pocket expenses.
6. Inspection: cost of inspection, including normal daily compensation, traveling expenses, room, and board
- Due Date: As incurred.
- Payable only if inspection discloses that you failed to comply with any provision of your Avis License Agreement or the Manual in a manner that would permit Avis to terminate your Avis License Agreement.
7. Interest: 2% over the prime interest rate (listed in the Wall Street Journal or other publication Avis selects) as of the 1st day of each month or highest rate the law allows, whichever is less
- Due Date: When any monies, which in any manner relate to your Avis Franchise, are not received by Avis or its affiliates when due.
- Interest begins to accrue the day after any monies are due.
8. Cost of Correcting Deficiencies: Avis’ reasonable costs and expenses
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- Due Date: As incurred.
- If you fail to correct operational deficiencies after notice, Avis may (but need not) correct the deficiencies, and you must reimburse Avis’ reasonable costs and expenses.
9. Indemnification: varies depending on circumstances
- Due Date: As incurred.
- You must indemnify Avis for claims, liability, losses, and expenses it incurs from your operations or dealings with third parties.
10. Termination Fee: six times the average monthly License Fee multiplied by a fraction, the numerator of which is the number of days between the date of (a) in the remarks below and end of 180-day notice period, and the denominator of which is 180
- Due Date: As incurred.
- If you terminate by giving 180 days’ notice to Avis and, in any calendar month during that 180-day period: (a) you cease operating the Avis Franchise; or (b) your Avis’ Franchise’s Gross Revenue is less than the average monthly Gross Revenue during the preceding year (or during the term of the Avis License Agreement, if less), then you must pay Avis this amount.
11. Fees Upon Temporary Operation of Business: Avis’ costs and expenses, including reasonable management fee
- Due Date: As incurred.
- Applies only if you are in default under the Avis License Agreement and Avis (at its option) assumes management of your Avis Franchise.
12. Costs and Attorneys’ Fees: will vary with the circumstances
- Due Date: As incurred.
- Due upon your failure to comply with the Avis License Agreement.
13. Current Rental System Service Charge: $0.183 per transaction, unless grandfathered in at $0.856
- Due Date: 45 days from the date of the Licensee Settlement Statement.
- The charge is for processing your rental transactions through Wizard.
14. Wizard Connection Start Fee: $320 per workstation
- Due Date: 45 days from the date of the Licensee Settlement Statement.
- One time set-up fee, per terminal, including Thin Client Terminals, before licensee begins to operate on Wizard.
15. Wizard Administrative Reporting Service Fees: $150 per month, plus $0.22 times the total value of the Club Billing transactions (with a minimum monthly Club Billing charge of $55)
- Due Date: 45 days from the date of the Licensee Settlement Statement.
- This fee covers the reports required for the Licensee’s use of Wizard as set forth in Schedule E of the Rental System Agreement, which is the Administrative Services Addendum.
16. Technical Support Service Fee (billed together with Wizard Internet Access Charge for a $42 charge): $24 per connected workstation per month
- Due Date: 45 days from the date of the Licensee Settlement Statement.
- This charge is for providing you with Help Desk support for Wizard.
17. Wizard Internet Access Charge (billed together with Technical Support Service Fee for a $42 charge): $18 per connected workstation per month
- Due Date: 45 days from the date of the Licensee Settlement Statement.
- Applies only if you choose to access Wizard through the Internet.
18. Thin Client Set Up Fees: will vary with the circumstances
- Due Date: As incurred for third-party vendor charges.
- Charges paid to Avis will be owed 45 days from the date of the Licensee Settlement Statement.
- Site Survey fees are required to be paid by you to an ABCR approved third-party vendor. One-time hardware, equipment, and installation fees are paid to Avis.
19. Frame Relay/ MPLS Network Infrastructure: $5,000 to $12,000, depending upon the number of terminals and hardware selected
- Due Date: 45 days from the date of the Licensee Settlement Statement.
- The fees will vary depending upon the size of your location, if you choose a redundant provider, terminal volume, and a variety of other factors.
- A Site Survey is required and will determine the system needs of the location.
20. Frame Relay/MPLS Charges: $480 to $970 per month
- Due Date: 45 days from the date of the Licensee Settlement Statement.
- The monthly fees will vary depending upon the size of your location, if you choose a redundant provider, terminal volume, and a variety of other factors.
- A Site Survey is required and will determine the system needs of the location.
21. Aruba/DSL Network Infrastructure: $1,000 to $1,200, depending upon the local internet service provider fees
- Due Date: 45 days from the date of the Licensee Settlement Statement.
- The fees will vary depending upon the size of your location, if you choose a redundant provider, terminal volume, and a variety of other factors.
- Some locations may not be conducive to an Aruba/DSL connection.
- A Site Survey is required and will determine the system needs of the location.
22. Aruba/DSL Charges: $135+ per month
- Due Date: 45 days from the date of the Licensee Settlement Statement.
- The fees will vary depending upon the local Internet provider.
- Some locations may not be conducive to an Aruba/DSL connection.
- A Site Survey is required and will determine the system needs of the location.
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