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Our Hope for Advantage Rent A Car

December 11, 2013

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Was the auction sale of a bankrupt Advantage Rent A Car on Monday the end of a tumultuous period in the company’s history, or just another abrupt change of ownership on its timeline into car rental oblivion? At this point, we don’t know.

But during this holiday season, and on the threshold of a new year, we can at least hope for a better future for Advantage, the company founded in 1963 in San Antonio by the Walker family.

We hope that Advantage’s new owners, Catalyst Capital Group, will know what they are doing, or at least put a team in place that does.

Private equity firms often operate with hubris commensurate to the size of their portfolio. The portfolio of Advantage’s previous puppet master, Macquarie Capital, is the size of a breakaway republic. Macquarie knew nothing about car rental — a poisonous mix — yet it even went so far as to replace the management the Federal Trade Commission approved. We hope Catalyst is smarter than that. And we hope Macquarie is free of this deal.

We hope that Advantage’s new management team can meet its initial challenges.

Those challenges are many. The new team will have to move headquarters and cities while disentangling Advantage from FSNA’s operations, insurance, IT, marketing, legal and accounting support in quick order. They will have to cover immediate financial obligations regarding rents, concession fees, travel agency fees, depreciation and payroll.

We hope Advantage will have money to buy fleet – thousands of cars, very soon. Advantage is sorely under-fleeted right now. Most of the cars that Advantage does have in fleet are Hertz’s — and Hertz wants its cars back.

We hope that Catalyst is putting its money where its mouth is, where Macquarie never did. Judging from the terms of the bankruptcy sale, this appears to be the case. But understand that the initial $46 million Catalyst pledged in debt financing will mostly be used to pay creditors. Advantage will need a lot more money for fleet.

We hope Advantage can find job openings for the people in the Advantage locations that will be closed. Expect closures. Advantage grew quickly to 72 locations because Hertz had to divest some Dollar and Thrifty airport stores to satisfy the FTC’s antitrust requirements in the Dollar Thrifty deal. Advantage picked up those extra stores. In retrospect, Macquarie’s decision to replace management and try to expand at the same time was foolish.

We hope that the FTC won’t screw this up again.

Though we’ll never see any outward signs, the FTC has to be smarting that Advantage declared bankruptcy mere months after the FTC finally blessed the deal, even as there were signs Advantage wouldn’t make its lease payments to Hertz, even as Sandy Miller jumped in front of this derailing train to say, “Stop!”

After that epic fail, we hope the FTC will remain silent on this one. A smaller Advantage is not what the FTC wants, for competition’s sake. But what can it do? Regulators are not in a position to force Advantage’s new owners to keep open stores it couldn’t support in the first place. (Advantage is a leisure brand. There is not a lot of leisure business in Cleveland.)

We hope for the best for Franchise Services of North America, and that FSNA can exit this mess with the ability to support its U-Save franchisees.

Moreover, we hope FSNA stockholders aren’t getting screwed in this deal. Remember, FSNA owned Advantage through the issuance of shares to Macquarie Capital. Now that Advantage is no longer part of FSNA, what happens to the stock?

Finally, we hope Advantage will continue under stable ownership for a long time. However, understanding that the nature of private equity is to sell or exit its investments in portfolio companies for a return, you do have to wonder where Advantage will wind up next.


  1. 1. S. Cox [ December 11, 2013 @ 03:16PM ]

    As a U-Save franchisee since 2006, I'm left with the lingering taste of Advantage's failure under the FSNA nameplate. As one of the few airport operators for U-Save, we were initially hopeful that bringing Advantage under the FSNA roof might enable the U-Save name to benefit from the obvious name recognition that this acquisition created. That said, my initial response to the purchase was "I sure hope they don't screw this up".
    Tragically, after promises made and broken to us throughout the last few months, a tumultuous summer of being continuously eviscerated by Advantage's $5.00 per day rates and the eventual communication shut down from all of our FSNA contacts and most of our U-Save management, my fears have come to pass. First Sandy Miller leaves (FSNA's words ... not mine), then Alan Wagner is subsequently fired. The culmination of the final, torrid act was the loss of, what I consider to be, the greatest portion of the brain-trust at U-Save; Bob Barton. Personally, I've always regarded Bob as the silent leader of our "boots on the ground" band of U-Save compatriots. The volumes of priceless information that left the hands of the owner-operators at U-Save when Bob was fired will certainly set the franchise back considerably.
    Honestly, I'm over this entire situation. We fought through the lowest revenue summer we've ever experienced (in over 20 years), to come out the other side licking the wounds inflicted primarily by the company that was supposed to be golden god of FSNA and, to some extent, the booster seat for all of the U-Save franchises. I'm not exactly sure who was steering the ship over the past few months, but while Advantage ate up millions of dollars of FSNA investors money, they also succeeded in driving market revenue down across the board in our little 'berg. Personally, I hope they pick up sticks and move on to destroy the rental car economy in someone else's city until they ultimately fall apart from lack of leadership and capital equally.

  2. 2. Neil Abrams [ December 12, 2013 @ 01:11PM ]

    Good synopsis of issues and challenges by Chris Brown. Notwithstanding the Macquarie fiasco, I strongly believe the industry needs the Advantage brand. This is a quarter billion dollar company with tens/hundreds of thousands of real customers in the growth segment of a $24 billion industry. We need a strong independent that can figure out how to make money. Much beleaguered over the pre-Hertz years and then as Hertz's consolation prize when it appeared the DTG deal would go South (pardon the pun), Advantage needs a strong, committed financial partner plus leadership that understands this "diamond in the ruff" brand - and how to optimize its value. I believe the leadership is in place - all they need is a good fleet plan, continue sound operating fundamentals, and a focus on the markets WHERE ADVANTAGE CUSTOMERS ACTUALLY VISIT. I wish Catalyst and Advantage management good luck and success.

  3. 3. J Congdon [ December 15, 2013 @ 07:02AM ]

    The destruction of the few U Save airport locations was assured when U Save at the Orlando Airport was shuttered and Advantage occupied the former U Save location. I will probably be able to use my FSNA stock for wallpaper as it's value is almost non existent. The FTC is AWOL on this disaster.

  4. 4. John Bringardner [ December 15, 2013 @ 09:26AM ]

  5. 5. Charles Hood [ December 16, 2013 @ 10:24PM ]

    Not something new. What happened to the company is common to all companies who had bad cases of mismanagement. It can really break a company and once done can sometimes not be undone anymore. Good thing that the company has been saved by new ownership.

  6. 6. Rob PhxRentalgod [ December 18, 2013 @ 04:19PM ]

    This is just another chapter in the Sandy Miller saga. He is a crook, he stole million from Budget stock holders and ruins many peoples retirements. Anyone who didn't see this coming was blind. Dont go near any Sandy Miller deal.

  7. 7. hello [ December 20, 2013 @ 11:10PM ]

    thanks for visting.

    Good synopsis of issues and challenges by Chris Brown. Notwithstanding the Macquarie fiasco, I strongly believe the industry needs the Advantage brand. This is a quarter billion dollar company with tens/hundreds of thousands of real customers in the growth segment of a $24 billion industry. We need a strong independent that can figure out how to make money. Much beleaguered over the pre-Hertz years and then as Hertz's consolation prize when it appeared the DTG deal would go South (pardon the pun), Advantage needs a strong, committed financial

  8. 8. jerry ceppos [ December 31, 2013 @ 01:06PM ]

    I am merely a customer so clearly rate low on Advantage's list of important people. Perhaps the industry needs Advantage, but I don't. We rented from what is misleadingly described on Advantage's receipts as the "San Francisco International Airport" location. The truth is that the agency is far from the airport...that we froze in the dark just before Thanksgiving while waiting forever for the shuttle....and my memory is that we were charged for possible damages (and the money later supposedly was returned), which I do not believe is the industry standard. I enjoyed reading why the industry needs Advantage, but I'll never rent from the company again.

  9. 9. Mark Gordon Cooper [ January 02, 2014 @ 12:49AM ]

    Catalyst Capital Group, all I have to say, as the Chief Science Officer for the Clean Air Fuel Efficiency Group of Products, is 80 MPG rental vehicles, changing oil once a year, cuting emissions up to 85% and extending the life of rentals by a factor of four or when you go to sell the asset off, to the consumer public, who wants to purchase an old rental which gets 80 MPG? Everyone!

    My own personal Prius, gets currently 83 MPG and this year I am likely going to reach 100 MPG, without Plug In conversion, without any "Deep Dark Magic", surprising enough through our US and International Patents for the application of Hydrocarbon Fuel Catalyst Processor, which are Pre Combustion and Recycling PCV "Blow By" "Out Gases" to reform them into combustion enhancing fuel.

    Our other technology came from deep in Private Aviation, it is a one time application, which eliminates friction, reduces heat and stops the lost of "Kinetic Energy" and it all ends up in lower maintenance costs, extended asset life, lower fuel costs for your customers and you, Catalyst Capital Group, have the Greenest Marketing Tool in the Global World, fuel cost savings for those who rent your 80 MPG Toyota Prius over the others Chevrolet Impala getting 25 MPG. Do you know how much a Field Service Engineering Corporation would save if they had 100 engineers traveling once a week, 500 miles, over the full year?

    The Math'

    $70 in fuel for a week with a 25 MPG Rental

    $21 in fuel for a week with a 80 MPG Rental

    $70 x 100 Engineers x 48 weeks = $336,000

    $21 x 100 " " x 48 weeks = $100,800

    Your customer will save $235,200 in fuel renting from you over the bigger companies.

    Which Companies, when your Marketing Team, presents, that they can spend $336,000 or

    rent for the exact same rate but save $235,200

    What do you think the CEO, CPA and Comptroller, is going to say, you rent exclusively from Catalyst Capital Group, the old Advantage Rental Company has actually become our own Advantage.

    Zig Ziglar once said "Become a Value to your Customer and you will become part of their Competitive Edge"

  10. 10. bob [ December 04, 2014 @ 03:13PM ]

    How did FSNA make out in this debacle? The stock does not trade and it appears shareholders got screwed. Barton got himself a nice job with hertz. Tom McDonnell doesn't communicate with the shareholders who supported him. This is very wrong.


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Author Bio

Chris Brown

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Executive Editor

Chris is the executive editor of Business Fleet Magazine and Auto Rental News. He covers all aspects of the fleet world.


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