Payless Car Rental Franchise Costs, Fees & Owner Salary (2023)

INVESTMENT

$606,000

-

$1,568,000

LOCATIONS

106

Adam

Updated

May 2, 2024

Is

Payless Car Rental

a franchise?

Yes,
Payless Car Rental
currently
accepts
franchise
applications

Payless Car Rental is a well-known franchise specializing in affordable and convenient car rental services. Founded in 1971, the franchise has its headquarters in St. Petersburg, Florida.

Payless Car Rental has been offering franchising opportunities, allowing entrepreneurs to become part of a brand recognized for its commitment to providing reliable and budget-friendly car rental solutions. At Payless Car Rental, customers can access a wide range of rental vehicles, including economy cars, SUVs, and vans, suitable for both business and leisure travel.

What sets Payless Car Rental apart from its competitors is its focus on affordability without compromising on quality or customer service. The franchise aims to make car rentals accessible to a broad range of travelers, offering competitive rates and a hassle-free rental experience.

How many

Payless Car Rental

franchises

are there?

In 2022, there were
106
outlets in
the United
States, of which
24
are franchises, and
82
are corporate-owned.

What are the

Payless Car Rental

franchise

fees?

Advertising fee

n.a.

Initial License Purchase Fee

The initial franchise fee for a Payless Car Rental franchise is based on the territory's population. It's typically $25,000 for areas with up to 50,000 people, increasing by $5,000 for every additional 5,000 people. This fee, determined using U.S. Census Bureau data, is non-refundable and fully earned upon the agreement's execution. Payless has the discretion to adjust this fee based on specific territory characteristics.

Transfer Fee

The Transfer Fee is charged when a franchise is sold or transferred. It amounts to 5% of the sales price (minimum $2,500).

Renewal Fee

A Renewal Fee of $2,500 is applicable when renewing the license agreement at the end of its term.

Rate Management Programs Fee

This fee ranges from $500 to $3,500 per month and is associated with the programs that manage the rates of car rentals.

Performance Deposit

A Performance Deposit ranging from $2,500 to $10,000 is required upon the execution of the License Agreement.

License Fees

License Fees are 7.5% of the Gross Revenue of the Rental Business. These fees are due monthly, by the 10th of each month, and are documented through the Monthly System Fee Report.

Note: The fees presented here can be found in the Item 5 of the Franchise Disclosure Document. For a complete list of all the fees borne by the franchisee, please consult the Franchise Disclosure Document.

How much does

it cost

to start a

Payless Car Rental

franchise?

It costs between
$606,000
and
$1,568,000
to start a
Payless Car Rental
franchise.
Expenditure Estimated Amount or Estimated Low-High Range (30 Car Fleet)
Initial License Purchase Fee(2) $0.00–$50,000
Construction, remodeling, decorating, and leasehold improvements(3) $15,000–$75,000
Furniture, fixtures, other fixed assets, and equipment(4) $15,000–$28,000
Signage(5) $10,000–$20,000
3 months’ rent and security deposits(6) $9,000–$18,000 for three month period
Vehicle Insurance Premiums(7) $15,000–$37,500
Grand opening advertising and promotional costs $2,000–$5,000
Office supplies $500–$2,000
Travel and living expenses during training (3 months to understand) $3,000–$7,500
Miscellaneous opening costs(8) $1,000–$3,000
Automobiles (9) $450,000–$1,290,000 plus interest
Additional funds—three months(10) $55,000–$72,400
TOTAL ESTIMATED INITIAL INVESTMENT(11) $575,500–$1,608,400

Note: The table above provides a snapshot of the main costs associated with starting the most common franchise format (as disclosed in the Item 7 of the Franchise Disclosure Document). For a complete overview of all the expenses involved with the various formats offered by the franchisor, please consult the Franchise Disclosure Document.

Does

Payless Car Rental

provide

training

to its

franchisees?

Yes,
Payless Car Rental
provides
training

The training provided by Payless Car Rental to franchisees includes a range of programs and instructions. Key components of this training are:

  1. Web-Based Training and Seminars: Payless updates and adds new web-based training programs and seminars periodically. These are mandatory for franchisees, their General Manager, and other managerial personnel. This also includes the requirement for franchisees to attend Payless conventions or seminars.
  2. On-the-Job Training: Instructors with a minimum of one year of experience in the car rental industry may provide on-the-job training. These instructors often belong to the Licensee Relations Department.
  3. Operating Assistance and Training: A comprehensive training program is provided, which includes courses, resources, webinars, and training materials to assist in training the franchisee's General Manager and employees in the operation of the Rental Business.
  4. Costs and Expenses: Franchisees are responsible for all expenses associated with these training programs, including travel, lodging, meals, and entertainment. All training must be completed to Payless's satisfaction.
  5. Numerous Web-Based Training Programs: Payless offers around fifty-five individual web-based training programs, covering various aspects of the car rental business, through Workday Learning.

Does

Payless Car Rental

provides

territory

protection?

Payless Car Rental provides territory protection for its franchisees. They are assigned an exclusive territory, typically defined by political boundaries or a specified area around the franchise location.

During the franchise term, Payless will not open or authorize another Payless franchise within this territory, provided the franchisee complies with all agreement terms. However, Payless retains the right to operate and grant licenses outside this territory and, in some cases, within the territory under specific circumstances.

Can a

Payless Car Rental

franchise

be run as

a passive

investment?

The Payless Car Rental franchise cannot be run purely as a passive investment. Active management by a trained professional is necessary, even if the franchise owner is not personally involved in daily operations.

The franchise requires the employment of a full-time General Manager who has completed Payless's training and will devote their entire time during normal business hours to managing, operating, and developing the franchise.

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