Nextcar Franchise
Audited FinancialsRisk Score
Pending analysis
Investment Range
$314,255 - $1,589,483
Franchise Fee
$23,000
Total US Locations
31
Business Summary
NextCar operates a business that offers a variety of motor vehicle services to the general public. These services include vehicle rentals, leases, carsharing, and other mobility solutions. Additionally, NextCar franchisees can offer rent-to-own programs and sell used vehicles.
Corporate History
NextCar's franchisor, NP Franchise Group, LLC, was originally established as Priceless Rent-A-Car, LLC in March 2004 and later renamed in June 2018. While NP Franchise Group itself does not operate vehicle rental businesses, its indirect parent, All Car Leasing, Inc., has owned and operated NextCar vehicle rental businesses since 2003. NextCar began offering its own franchises in January 2015. The company also has a history with other brands; its predecessors offered franchises under the 'Priceless' name since 1996, and an affiliate, Bundy American, LLC, offered 'Rent-A-Wreck' franchises from 1978 to 2017. A corporate reorganization in April 2018 led to All Car Leasing purchasing NP Franchise Group's ownership interests, and then NP Auto Group, Inc. became the direct parent.
Financial Overview
Investment Range
$314,255 - $1,589,483
Franchise Fee (Low)
$23,000
Franchise Fee (High)
$125,000
Royalty %
4%
Marketing %
1%
Equipment Costs (Low)
$7,500
Equipment Costs (High)
$47,000
Working Capital
$30,000
Audited Financials
Yes
Offers Financing
Yes
Audit Opinion
Unqualified opinion
Financial Health Notes
NextCar's audited financial statements show a positive trend in members' equity, moving from a deficit of $438,305 in July 2021 to a positive $1,836,190 by January 2024. The independent auditor has issued an unqualified opinion, indicating that the financial statements present fairly, in all material respects, the financial position of NextCar.
Financing Details
NextCar's affiliate, KFL, LLC, offers a fleet leasing program for vehicles to franchisees who meet specific credit, geographic, and business management qualifications. This program provides financing for the vehicles needed to operate the rental business. There is no down payment required, and the lease terms typically range from 1 to 30 months, with an initial maximum term of 12 months that can be extended up to three additional 6-month periods. Monthly payments include a depreciation charge of 1.8% to 2.25% of the original financed amount, an interest rate that varies at Prime +3% to 4% (calculated monthly), and a $18 per vehicle administrative fee. Franchisees are required to maintain a $750 security deposit per leased vehicle, paid in two installments. At any time, franchisees have the option to purchase the leased vehicle at its book value. However, personal guarantees from individual franchise owners are required. In case of default, KFL, LLC can terminate the lease, repossess the vehicles, and the franchisee would be liable for the difference between the vehicles' book value and their net liquidation value, plus various fees and costs.
Performance Metrics
Total US Locations
31
Franchised Units
14
Corporate Units
17
Avg Square Footage
1,200
Franchising Since
2015
Legal & Compliance Analysis
Recent Litigation
No
Bankruptcy
Yes
Litigation Summary
NextCar has no litigation or legal disputes required to be disclosed in Item 3 of its Franchise Disclosure Document. This means NextCar has not been involved in any material litigation in the past three years that would typically need to be reported.
Bankruptcy History
NextCar's former parent company, Bundy American, LLC, along with Bundy American's parent, Rent-A-Wreck of America, Inc., both filed for Chapter 11 bankruptcy reorganization in the District of Delaware on July 24, 2017. However, these bankruptcy actions were dismissed by the Bankruptcy Court on February 13, 2018. NextCar's current President and Director, Michael DeLorenzo, and Secretary and Director, Ronald Jaffe, were officers and directors of Bundy American and Rent-A-Wreck of America when these petitions were filed.
Agreement Terms
Training & Support Program
Franchisor Assistance
NextCar provides comprehensive support to its franchisees. Before opening, NextCar assists with site approval and provides an initial operations training program, which covers philosophy, system standards, and operating aspects. Franchisees receive online access to the confidential operating manual and guidance for startup operations, including consulting on site selection and fleet planning. NextCar also negotiates purchase arrangements with designated preferred providers and provides access to its proprietary ASAP Computer System. After opening, NextCar continues to provide guidance through updates to the operating manual, assistance with administrative, bookkeeping, accounting, and inventory control processes, and help with pricing models upon request. NextCar establishes various marketing programs, promotions, and customer satisfaction initiatives. It also offers additional training, including an online Rental Car Online University (RCOLU) for a monthly fee, regional training, and national meetings.
Initial Training Hours
46
Training Location
Laurel, MD
Ongoing Support
After opening, NextCar franchisees receive ongoing guidance including updates to the operating manual, assistance with administrative, bookkeeping, accounting, inventory control processes, and pricing models. NextCar establishes and administers various programs, promotions, and campaigns for the benefit of franchisees, such as credit card programs, reservation services, special offers, and marketing/advertising. It also implements customer satisfaction and quality assurance programs. While not mandatory, franchisees are encouraged to attend additional training or refresher courses held at NextCar's offices, regional and national meetings, and through online training classes, webinars, and live sessions. Franchisees pay a $25 monthly fee for access to the Rental Car Online University (RCOLU), offering numerous online courses on topics relevant to the business. NextCar may also form a Franchise Advisory Council to advise on advertising, marketing, and operating policies.
Franchise Requirements
Ideal Candidate Profile
NextCar is particularly interested in individuals who already own or operate new or used-car dealerships and want to offer vehicle rentals, leases, carsharing, rent-to-own, and used vehicle sales. The ideal candidate shares NextCar's vision for providing quality, reliable, and valuable services to customers in the vehicle rental business.
Industry Experience Required
No
Management Experience Required
No
Sales Experience Required
No
Technical Skills Required
No
Operational Details
Location Type
Commercial
Owner Participation
Absentee Allowed
Territory Type
Limited
Territory Size Requirements
NextCar offers franchisees three territorial options. For a Six-Mile Primary Service Area, the territory is a circular area with a 6-mile diameter (3-mile radius) centered around an agreed-upon location. Within this area, franchisees are generally required to maintain a minimum fleet of 1 car per every 1,000 inhabitants by the third anniversary of the Franchise Agreement. For an Airport Primary Service Area, the territory is typically defined as the right to serve deplaning passengers at a specific airport, with a mutually agreed-upon minimum fleet. For a Single Point Location, the franchise operates at a single site only with no territorial protection and requires a minimum fleet of 10 cars within one year of opening.
Staffing Notes
NextCar does not require the franchisee to personally participate in the direct daily operations of the business. However, the franchised business must always be supervised on-premises by either the franchisee or a trained and competent general manager. This general manager, or the franchisee if they choose to manage, must be employed full-time and dedicate all their normal business hours to managing and developing the business. NextCar requires that any new supervisory employees complete its initial operations training. Franchisees are responsible for developing and implementing employee training in other areas, and NextCar provides a Rental Car Online University program to assist with this.