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Description
Investment Icon

What is the Initial Investment for a Hertz Franchise?

To open a Hertz franchise, the initial investment can vary significantly, ranging from $879,300 to $15,839,000. This investment includes a franchise fee that typically falls between $25,000 and $100,000. Additionally, you should be prepared for cash requirements of $25,000 to $100,000 and a net worth requirement ranging from $500,000 to $1,500,000. Understanding these financial commitments is crucial for aspiring franchisees to ensure they are adequately prepared for the journey ahead.

Fees Icon

What Are the Ongoing Fees for a Hertz Franchise?

Owning a Hertz franchise comes with ongoing fees that are essential to factor into your financial planning. The royalty fee for a new unit is set at 6%, in addition to a marketing fee of 6%. These fees contribute to the overall operational costs and marketing efforts of the franchise, providing support and resources that can help drive business success. It’s important to understand these ongoing financial obligations to maintain profitability and sustain growth.

Revenue Icon

What Are the Financial Performance Metrics for Hertz Franchise Units?

Hertz franchise units can generate substantial revenue, with an average annual revenue of approximately $8,685,000 per unit. The median annual revenue stands at $1,083,000, while the lowest recorded annual revenue is $3,756,000 and the highest is $3,000,000. These figures highlight the potential for profitability and the importance of effective management strategies to optimize financial performance within the franchise model.

Breakeven Icon

What Is the Breakeven and Payback Period for a Hertz Franchise?

Franchisees can expect a breakeven time of around 12 months, indicating a relatively quick recovery of the initial investment. Furthermore, the investment payback period is approximately 18 months, which suggests that franchisees may begin to see returns on their investment within a year and a half. This timeline is an important consideration for potential franchisees, as it provides insight into the financial viability and potential success of operating a Hertz franchise.

Hertz Franchise Financial Requirements

Below, you’ll find an overview of the initial investment needed to launch the business, along with the ongoing fees required by the franchisor to maintain operations over time.

Net Worth Required icon The minimum total assets (minus liabilities) you must possess.

i Net Worth Required:

$500,000 - $1,500,000
Investment Payback icon The estimated period to recoup your total investment.

i Investment Payback:

18 Months
Franchise Fee icon The initial fee paid to join the franchise system.

i Franchise Fee:

$25,000 to $100,000
Royalty Fee icon Ongoing percentage of revenue paid to the franchisor.

i Royalty Fee:

6%
Marketing Fee icon Regular contribution toward the franchise’s advertising fund.

i Marketing Fee:

6%
Breakeven Time icon The estimated timeframe to recover your initial costs.

i Breakeven Time:

12 Months
Initial Investment icon The total amount required to launch the franchise.

i Initial Investment:

$879,300 - $15,839,000
Cash Required icon The minimum liquid capital you must have on hand.

i Cash Required:

$25,000 - $100,000
Average Revenue icon The typical yearly revenue generated per franchise location.

i Average Revenue:

$22,327
Median Revenue icon The middle value of yearly revenue among franchise locations.

i Median Revenue:

$1,083,000
Highest Revenue icon The largest reported annual revenue among franchisees.

i Highest Revenue:

$3,000,000
Lowest Revenue icon The smallest reported annual revenue among franchisees.

i Lowest Revenue:

$3,756,000
Industry icon A broad sector defining similar types of franchise businesses.

i Industry:

Industrial Franchises
Category icon A more specific division within the broader industry.

i Category:

Equipment Rental
Leadership icon The key individuals guiding the franchise’s strategy and growth.

i Leadership:

Stephen Scherr
Corporate Address icon The official business address of the franchisor’s headquarters.

i Corporate Address:

8501 Williams Road Estero, Florida 33928
Funding Year icon Available financing options to help start the franchise.

i Funding Year:

1918
Parent Company icon The main organization that owns the franchise brand.

i Parent Company:

Hertz System, Inc.

Hertz Franchise Unit Growth Summary

A breakdown of corporate, franchised, and total units, with yearly net changes.

The overall number of operating franchise locations.

Total Units i

3545
The number of locations owned by independent franchisees.

Franchised Units i

343
The number of locations owned and run by the franchisor.

Corporate Units i

3202
Units 2020 2021 2022
Total Units 3701 3514 3545
Net Change YoY -187 31
Franchised Units 275 282 343
Net Change YoY 7 61
Corporate Units 3426 3232 3202
Net Change YoY -194 -30
Investment About

Investment Overview

The initial investment to open a Hertz franchise ranges from $879,300 to $15,839,000, depending on various factors such as location and facility size. The franchise fee varies between $25,000 and $100,000, making it accessible for a range of investors. Additionally, potential franchisees should be prepared for ongoing royalty and marketing fees of 6% each, which are standard in the car rental industry.

Potential About

Financial Requirements

To qualify for a Hertz franchise, prospective owners must have a net worth between $500,000 and $1,500,000 and liquid cash available ranging from $25,000 to $100,000. These financial prerequisites ensure that franchisees have the necessary resources to operate and grow their business effectively while managing initial operational costs.

Metrics About

Revenue Potential

Hertz franchises demonstrate significant revenue potential, with average annual revenue per unit reported at $8,685,000. The median annual revenue stands at $1,083,000, showcasing the brand's robust market presence. However, annual revenues can vary widely, with the lowest reported at $3,756,000 and the highest reaching $3,000,000, indicating diverse performance across units.

Fees About

Breakeven and Payback

Franchisees can expect to reach breakeven within approximately 12 months of operation, making Hertz a relatively quick-return investment. The investment payback period is estimated at 18 months, providing a clear timeline for recovering initial costs and beginning to realize profit, which is a crucial factor for many investors.

Breakeven About

Unit Growth

Hertz has shown consistent growth in franchised units, increasing from 275 in 2020 to 343 in 2022. This upward trend reflects the brand's expanding market presence and the increasing interest among entrepreneurs in the car rental sector. In contrast, corporate units have slightly declined, indicating a strategic shift towards franchising as a growth model.

Units About

Operational Expenses

Franchisees should be aware of various operational expenses, which can range widely. Key expenses include insurance, professional fees, and technology costs, with total annual expenses varying from $879,300 to $15,839,000. Understanding these costs is essential for effective budgeting and financial management, ensuring that franchisees can maintain profitability while meeting operational demands.

Frequently Asked Questions

The initial investment for a Hertz franchise ranges from $879,300 to $15,839,000, which includes the franchise fee and various startup costs.