Avis 2013 Annual Report Download - page 39

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We face risks related to changes in healthcare laws.
In 2010, the United States enacted significant healthcare reform laws, many of which have provisions that take
effect in 2014. Due to the breadth and complexity of the legislation, uncertainty regarding the effect of these laws
on healthcare costs generally, and uncertainty regarding how large employers will respond to the new laws and
regulations, it is difficult to predict the overall impact of these laws on our business over the coming years.
Significant increases in costs due either to the new laws or general healthcare cost increases could adversely
impact our financial condition or results of operations, expose us to expanded liability, adversely impact our ability
to attract or retain employees, or require us to revise the ways in which we conduct business.
We face risks related to franchising or licensing laws and regulations.
We sometimes sell licenses to third parties to operate locations under our brands in exchange for the payment of
a royalty by the third-party licensee. Our licensing activities and sales are subject to various state and federal laws
and regulations. In particular, the U.S. Federal Trade Commission requires that we make extensive disclosure to
prospective licensees but does not require registration. A number of states require registration and/or disclosure in
connection with licensing offers and sales, as well as franchise relationship laws that could limit our ability to,
among other things, terminate license agreements or withhold consent to the renewal or transfer of these
agreements. We are also subject to certain regulations affecting our license arrangements in Europe and other
international locations. Although our licensing operations have not been materially adversely affected by such
existing regulations, such regulations could have a greater impact on us if we were to become more active in
granting or selling new licenses to third parties. Should our operations become subject to new laws or regulations
that negatively impact our ability to engage in licensing activities, our financial condition or results of operations
could be adversely impacted.
We face risks related to the actions of, or failures to act by, our licensees, dealers or independent
operators.
Our vehicle rental licensee and dealer locations are independently owned and operated. We also operate many of
our Company-owned locations through agreements with “agency operators,” which are third-party independent
contractors who receive commissions to operate such locations. Our agreements with our licensees, dealers and
agency operators (“third-party operators”) generally require that they comply with all laws and regulations
applicable to their businesses, including our internal policies and standards. Under these agreements, third-party
operators retain control over the employment and management of all personnel at their locations. Regulators,
courts or others may seek to hold us responsible for the actions of, or failures to act by third-party operators.
Although we actively monitor the operations of these third-party 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 of third-party operators may not be clearly
distinguishable from our own. It is our policy to vigorously seek to be dismissed from any such claims involving
third-party operators and to pursue indemnity for any adverse outcomes that affect our Company. Failure of third-
party operators to comply with laws and regulations may expose us to liability, damages and negative publicity
that may adversely impact our financial condition or results of operations.