Avis 2009 Annual Report Download - page 21

Table of Contents
Loss Damage Waivers
A traditional revenue source for the vehicle rental industry has been the sale of loss damage waivers, by which rental companies agree to relieve
a customer from financial responsibility arising from vehicle damage incurred during the rental period if there has been no breach of the rental
agreement. Approximately 4% of our domestic car rental revenue during 2009 was generated by the sale of loss damage waivers. To date, 24
states have enacted legislation which requires disclosure to each customer at the time of rental that damage to the rented vehicle may be covered
to some extent by the customer’
s personal automobile insurance and that loss damage waivers may not be necessary. In addition, four states have
statutes which establish or cap the daily rate that can be charged for loss damage waivers.
Insurance
As a result of our reinsurance of the optional insurance coverages that we offer through an unaffiliated third party insurance company as well as
other insurance obligations, we are subject to regulation under the insurance statutes, including insurance holding company statutes, of the
jurisdictions in which our insurance company subsidiaries are domiciled. These regulations vary from jurisdiction to jurisdiction, but generally
require insurance holding companies and insurers that are subsidiaries of insurance holding companies to register and file certain reports,
including information concerning their capital structure, ownership, financial condition and general business operations with the regulatory
authority of the applicable jurisdiction, and require prior regulatory agency approval of changes in control of an insurer and intra-corporate
transfers of assets within the holding company structure. Such insurance statutes may also require that we obtain limited licenses to sell optional
insurance coverage to our customers at the time of rental.
Franchise Regulation
The sale of franchises is regulated by various state laws, as well as by the Federal Trade Commission (the “FTC”). The FTC requires that
franchisors make extensive disclosure to prospective franchisees but does not require registration. A number of states require registration or
disclosure in connection with franchise offers and sales. In addition, several states have “franchise relationship laws” or “business opportunity
laws” that limit the ability of the franchisor to terminate franchise agreements or to withhold consent to the renewal or transfer of these
agreements. Although our franchising operations have not been materially adversely affected by such existing regulations, we cannot predict the
effect of any future federal, state or local legislation or regulation.
Privacy
Laws in some countries and jurisdictions limit the types of information we may collect about individuals with whom we deal or propose to deal,
as well as how we collect, retain and use the information that we are permitted to collect, some of which is non-public personally identifiable
information. The centralized nature of our information systems requires the routine flow of information about customers and potential customers
across national borders, particularly into the United States. If this flow of information were to become illegal, or subject to onerous restrictions,
our ability to serve our customers could be seriously impaired for an extended period of time. In addition, our failure to maintain the security of
the data we hold, whether as a result of our own error or the actions of others, could harm our reputation or give rise to legal liabilities leading to
lower revenue, increased costs and otherwise adversely impact our results of operations.
EMPLOYEES
As of December 31, 2009, we employed approximately 22,700 employees, of which approximately 8,000 were employed on a part-time basis.
Approximately 26% of our employees are covered by collective bargaining agreements. We believe our employee relations are satisfactory. We
have never experienced a large-scale work stoppage.
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