Avis 2008 Annual Report Download - page 27

Changes in the U.S. and foreign legal and regulatory environment that affect our operations, including laws and regulations relating to the
insurance products we sell, consumer privacy, data security, employment matters, taxes, automobile-related liability and insurance rates,
could disrupt our business, increase our expenses or otherwise have an adverse impact on our results of operations.
We are subject to a wide variety of laws and regulations in the United States and the other countries and jurisdictions in which we operate, and
changes in the level of government regulation of our business have the potential to materially alter our business practices or our profitability.
Depending on the jurisdiction, those changes may come about through new legislation, the issuance of new laws and regulations or changes in
the interpretation of existing laws and regulations by a court, regulatory body or governmental official.
Optional insurance products, including, but not limited to, supplemental liability insurance, personal accident insurance and personal effects
protection, we offer to renters providing various insurance coverages in our domestic vehicle rental operations, are regulated under state laws
governing the licensing of such products. In our international car rental operations, our offering of optional products providing insurance
coverages historically has not been regulated.
Any changes in U.S. or foreign law that change our operating requirements with respect to optional insurance products could increase our costs
of compliance or make it uneconomical to offer such products, which would lead to a reduction in revenue and profitability. If customers decline
to purchase supplemental liability insurance products from us as a result of any changes in these laws or otherwise, our results of operations
could be materially adversely affected.
In almost every state, we recover from consumers various costs associated with the title and registration of our vehicles. In addition, where
permitted, we also recover from consumers certain costs, including concession costs imposed by an airport authority or the owner and/or
operator of the premises from which our vehicle is rented. Our long-standing business practice has been to separately state the existence of these
additional costs in our rental agreements and invoices, and disclose to consumers additional surcharges used to recover such costs together with
an estimated total price, inclusive of these surcharges, in all distribution channels. We believe that this standard practice comports with the
Federal Trade Commission Act and has been upheld by several courts. We may in the future be subject to potential legislative changes or
administrative action which could limit, restrict or prohibit our ability to separately state, charge and recover such costs, which would result in an
adverse cost reallocation. If any such changes were to be enacted there may be an adverse impact or limitation on our ability to recover all of the
surcharges we currently charge, which could adversely impact our profitability and results of operations.
We are also subject to numerous other laws and regulations in numerous jurisdictions. Changes in such laws and regulations could adversely
impact our financial position and results of operations.
We may be held responsible by third parties, regulators or courts for the actions of, or failures to act by, our licensees, dealers or independent
operators, which exposes us to possible fines, other liabilities and bad publicity.
Our car and truck rental franchisee and dealer locations are independently owned and operated. We also operate many of our corporate locations
through agreements with “agency operators,” which are third party independent contractors who receive commissions to operate such locations.
Our agreements with our franchisees, dealers and agency operators require that they comply with all laws and regulations applicable to their
businesses, including our internal policies and standards. Under these agreements, our franchisees, dealers and agency operators retain control
over the employment and management of all personnel. Third parties, regulators or courts may seek to hold us responsible for the actions of, or
failures to act by, our franchisees, dealers or agency operators. Although we maintain the right to monitor the operations of these franchisees,
dealers and agency operators, and under certain circumstances have the ability to terminate their agreements for failure to adhere to contracted
operational standards, we are unlikely to detect all problems. Moreover, there are occasions when the actions and activities of
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