Hertz car rental franchise at Napier Airport

All vehicles in the Hertz fleet at Napier Airport are less than three years old. Photo / Supplied

Hawke's Bay Hertz at Napier Airport — one of the nation's few independently owned regional car rental franchises — is now on the market for sale.

Bayleys Napier salesman Rodger Howie is selling the car rental business, which operates in the airport terminal, at 111 Main North Rd, Napier.

One of only six such privately owned Hertz entities in the country, (as most are run from the company's head office), the sale is to be by an expressions of interest campaign, closing at 2pm on March 25.

Howie points out that Hertz and Avis are the two biggest vehicle rental operators in Hawke's Bay.

"The substantial operation is one of five international car rental brands operating out of the airport, but it holds exclusive rights to the only petrol pump for vehicle refuelling at the airport," he says.

Hertz employs 10 staff on a mix of full-time and part-time contracts; a branch manager; three customer service representatives; three vehicle groomers, who clean dropped-off vehicles, and three drivers, who relocate vehicles between branches.

Hawke's Bay Hertz is for sale with some $1.58m of rental vehicles included among chattels: a fleet comprising 60 late-model Hyundai, Toyota, Ford, Holden, Mazda, Kia, Mitsubishi and Nissan saloon cars and sports utility vehicles (SUVs).

"A major advantage for Hertz franchisees is that franchisor Hertz Corporate has the resources, relationships, and back-office expertise to negotiate with multinational, corporate and government clients to secure long-term supply contracts which flow down to its franchises," he says.

"Operating under global brand-standards and procedures, local Hertz franchises need not worry about marketing; they concentrate on face-to-face customer service and fleet maintenance to comply with the brand's high standards, key reasons why Hertz secures such abundant repeat business."

Hertz runs some 10,200 franchises globally, and thanks to its global buying power the Hawke's Bay franchise, can buy new vehicles at extremely competitive rates, Howie says.

Franchisees pay Hertz a set franchise fee based on the branch's total turnover. "The franchise model requires continuous upgrading of the fleet to meet Hertz's franchise criteria; as a result, all vehicles within the fleet are less than three years old.

"Meanwhile, there's potential to grow the Hawke's Bay rental fleet. Growth calculations based on company bookings from the past two years show the Hawke's Bay vehicle leasing business could accommodate another 20 fleet vehicles."

Financial records show Hertz Hawke's Bay's revenue in the 2017/18 financial year was up 9 per cent on the previous trading period. In the year to last March 31 it turned over $1.3m.

Advance payment of car reservations before vehicle collection means there are no bad debts for operators, with franchisees reconciled daily to deliver strong cashflows.

The company operates from leased premises within Hawke's Bay Airport in Napier.

Its current lease runs through to 2025 with three further five-year rights of renewal. That includes 65 car parks in Hertz's airport depot and 21 spaces in the main terminal carpark.

There are potentially more car parks being made available once expansion works at the airport are completed, says Howie.

"Access to those additional car parks when they are complete would work coherently with increasing the branch's fleet size."