Thrifty Car Rental 2006 Annual Report Download - page 13

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As of December 31, 2006, Dollar’s vehicle rental system included 358 locations in the United States and
Canada, consisting of 200 company-owned stores and 158 franchisee locations. Dollar’s total rental
revenue generated by company-owned stores was $923 million for the year ended December 31, 2006.
Thrifty
Historically, Thrifty’s main focus had been on franchising and franchise support services. However, in
2003, Thrifty began shifting to operating more company-owned stores by acquiring franchisee locations in
key markets. Thrifty continued to acquire franchisee locations during 2006; however, the majority of the
acquisition opportunities are now completed. Thrifty U.S. company-owned locations increased to 152 at
December 31, 2006 from 129 at December 31, 2005. Thrifty’s U.S. company-owned stores and its
franchisees derive approximately 80% of their combined rental revenues from the airport market and
approximately 20% from the local market. Thrifty’s approach of serving both the airport and local
markets allows many of its franchisees and company-owned stores to have multiple locations to improve
fleet utilization and profit margins by moving vehicles among locations to better address demand between
these markets. At December 31, 2006, Thrifty had 109 company-owned and franchised in-terminal
airport locations in the United States.
As of December 31, 2006, Thrifty’s vehicle rental system included 478 rental locations in the United
States and Canada, consisting of 271 franchisee locations and 207 company-owned stores. Thrifty’s total
rental revenue generated by company-owned stores was $616 million for the year ended December 31,
2006.
Corporate Operations
United States
Beginning in 2003, the Company implemented a new operating model for U.S. Dollar and Thrifty
company-owned stores, which included generally maintaining separate airport counters, bussing,
reservations, marketing and all other customer contact activities, while using a single management team
for both brands. In addition, this operating model included sharing vehicles, back-office employees and
service facilities, where possible.
As of December 31, 2006, the Company operates the Dollar brand in 58 and the Thrifty brand in 53 of the
top 75 airport markets in the United States and operates both brands in 47 of these top 75 airport
markets. During 2006, the Company added the Dollar brand in four and the Thrifty brand in eight of the
top 75 airport markets by acquiring franchisee locations.
Canada
The Company operates in Canada through DTG Canada. Thrifty has historically had a strong corporate
presence in Canada, and, during 2003, Dollar acquired its master franchise rights in Canada and began
re-acquiring its franchisee locations in the eight largest airport markets in Canada. The Company
operates corporate stores in all eight of the largest airport markets in Canada, which includes Calgary,
Winnipeg, Ottawa, Toronto, Montreal, Halifax, Edmonton and Vancouver. The majority of the markets are
operated under the Company’s co-branding strategy in Canada where both the Dollar and Thrifty brands
are represented at one shared location.
Franchise Acquisition Program
The Company is pursuing opportunities to acquire both Dollar and Thrifty franchise operations in the top
75 U.S. airport markets and other key leisure markets. In 2003, Thrifty began shifting to operating more
company-owned stores by acquiring franchisee locations on an opportunistic basis in key markets. In
2006, Thrifty continued this strategy by acquiring the Thrifty franchise operations in twelve U.S. markets:
Little Rock, Arkansas; Providence, Rhode Island; Cincinnati, Columbus and Dayton, Ohio; Milwaukee and
Madison, Wisconsin; Pensacola, Florida; Phoenix, Arizona; Reno, Nevada; and San Antonio and El Paso,
Texas. Dollar acquired the Dollar franchise operations in six U.S. markets: Nashville, Tennessee;
Oklahoma City and Tulsa, Oklahoma; Minneapolis, Minnesota; Madison, Wisconsin; and El Paso, Texas.
Dollar and Thrifty generally have the right of first refusal on the sale of a franchise operation. As of
December 31, 2006, the Company had completed the majority of its acquisition program.
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