Green Motion: Young, Niche, and Nimble

Green Motion opened its first California franchise location at the San Diego International Airport in July. Founder and CEO Richard Lowden (center) holds the ribbon while new franchisee Xavier Ortiz-Mena, CEO, gets ready to cut it during the opening ceremony on July 1, 2016. Photo courtesy of Green Motion.
Green Motion opened its first California franchise location at the San Diego International Airport in July. Founder and CEO Richard Lowden (center) holds the ribbon while new franchisee Xavier Ortiz-Mena, CEO, gets ready to cut it during the opening ceremony on July 1, 2016. Photo courtesy of Green Motion.

Continuing to expand its franchise locations worldwide, Green Motion has started to make its mark in the United States. Currently, the brand with the eco-friendly focus has franchises in two states — California (San Diego) and Florida (Fort Lauderdale, Miami, and opening soon in Orlando).

Green Motion launched in 2007 in the United Kingdom. “After launching a car rental brand called Eurodrive in 1993, I was continually frustrated that it didn’t have anything unique about it — we were just a smaller version of the multi-national rental operations,” says Richard Lowden, Green Motion’s founder and CEO. “It was just another car rental company. I decided to look at becoming a car rental company with an environmental focus.”

Lowden wanted his new brand to provide the lowest emission fleet, but it had to be done in a cost-effective manner for both the customer and the operator. “I learned people are happy to go green if it doesn’t cost a premium,” Lowden says. “We built the business around this philosophy — we would be more nimble than other competitors and have this disruptor of being green.”

International Expansion

The brand’s international expansion started unexpectedly, when a rental operator of another franchise system in Mexico reached out to Green Motion in 2010. The operator was not able to acquire more territories with his original brand, and to expand he needed to join another system or go independent. The licensee switched to Green Motion, and Mexico became the company’s first international franchise. Green Motion’s Mexico franchisee has since grown to 40 locations.

In 2012, Lowden decided to license existing U.K. locations as a master franchise instead of each office separately. The company then turned to developing master franchises in overseas markets. Today, Green Motion operates solely as a franchisor — with no corporate locations — in 26 countries, with six additional countries in negotiations, according to Lowden.

In the U.S., Green Motion is offering franchise licenses on a state-by-state basis; seven states are in negotiations now. “Green Motion is bringing a new and fresh perspective to the U.S. rental market,” says Lowden. “Our environmental focus impacts the way we do business before, during, and after the customer has visited our location and rented a vehicle.”

Becoming a Franchisee

Green Motion’s partnership with Patricio Franulic has enabled him to expand from his beginnings as a small independent in Miami. In fact, Franulic’s fleet has more than quadrupled with Green Motion’s help — from 45 cars to about 300 in less than a year.

Before signing as a Green Motion franchisee, Franulic considered several franchise and affiliate options. He chose Green Motion in part for its fee structure, which was more attractive than the others, he says.

According to Franulic, another benefit has been access to the brand’s booking channels. “Green Motion has given us so much exposure that we didn’t have,” says Franulic. “It has catapulted my company to a whole new level.”

Franulic bought the franchise rights for the state of Florida and plans to expand further within the state.

The Right Connections

In addition to brand identity, a key benefit of joining a franchise is an additional flow of reservations.

Green Motion is connected to more than 40 booking channels. This includes car rental aggregators such as Rentalcars.com, Holiday Autos, CarTrawler, CarRentals.com; online travel agencies such as Expedia Europe; and global distribution systems (GDS) Sabre, Worldspan, and Galileo. Green Motion expects to go live with Expedia U.S. in late August, and is in negotiations to connect with Priceline, Hotwire, and others, Lowden says.

As a newer company, Green Motion has built its technology without the burden of having to integrate with a legacy system — or having to deal with layers of bureaucracy on decision-making, says Lowden. This allows for quick turnarounds when dealing with a booking channel for things like special offers.

“We’re able to react. Our technology can do it in minutes,” he says. “And with the big multinational [car rental companies] it might take a lot of sign offs.”

Green Motion’s reservation management platform is integrated with a third-party rental system powered by Wheels Car Rental System, developed by multinational IT-provider Invensys. The company partnered with Invensys for its ability to serve multiple languages, currencies, and tax systems. “We chose a new, modern system we can flex to every country we go into,” Lowden says.

“The connectivity to Green Motion is seamless and occurs in real time,” says Franulic. “We can see a booking reflected in our system immediately.”

Patricio Franulic (far right) runs the master franchise for the state of Florida. After joining Green Motion, his independent rental company grew from 45 vehicles to about 300 in less than a year. Photo courtesy of Patricio Franulic.
Patricio Franulic (far right) runs the master franchise for the state of Florida. After joining Green Motion, his independent rental company grew from 45 vehicles to about 300 in less than a year. Photo courtesy of Patricio Franulic.

On the location level, Franulic says the Green Motion system has been helpful and responsive to make changes promptly and adapt the system to each rental location’s specific needs.

In addition to Green Motion’s online channels, Franulic also advertises in the Miami market to gain more local customers, including corporate rental accounts. Green Motion trains franchisees on gaining local corporate business with its USP of lowering carbon emissions, Lowden says.

Currently, about 35% of his bookings are from local business while 65% come from online channels, a healthy balance of inbound and local traffic.

Going Green

Green Motion works with franchisees on fleet acquisitions. Lowden says the company can leverage its international volume for better vehicle pricing and also affords its franchisees short-term buyback programs that would not be available to an independent. Its first U.S. buyback program is in the works, he says.

Lowden admits that the U.S. and European markets are different when it comes to fuel-efficient fleets. For this reason Green Motion doesn’t force its franchises to buy only hybrid and electric vehicles. This is good news to Franulic, who has seen uncertain residual values on hybrids due to lower fuel prices. “Green Motion asks that we pick the most fuel-efficient vehicles within their classes,” says Franulic. “Currently about 80% of our fleet is compact and economy cars.”

Nonetheless, locations like San Diego are introducing some all-electric vehicles such as Tesla because it makes business sense for that market, Lowden says. Renters can also help green the environment through an optional fee that goes to replenish the rainforest in Costa Rica.

This flexibility in fleet still carries transparency. “We publish once a year our average emissions per location,” Lowden says. “We are upfront and honest in how we buy fleet.”

Regarding branding, Green Motion allows for more flexibility for startup locations. “The key aspect is business first,” Lowden says. “We have done [branding] in a way that doesn’t strangle the franchisee. As the location becomes profitable, then we can go through a re-evaluation stage that freshens it up and brings it up a level.”

Ideal Candidates

The Green Motion agreement in the U.S. allows a franchisee the option to operate all of the locations in its state or sub-franchise some locations. In 2017, Franulic is looking to begin sub-franchising in other cities in Florida.

After signing the franchise agreement, each franchisee completes a training program. The amount of training depends on the franchisee’s experience, according to Lowden. Training on Green Motion’s systems takes place on-site at a brand location.

“Our California franchisee was trained in our Rome location followed by London,” says Lowden. “They got a real-life experience of renting cars at a busy, major airport location.”

Lowden recommends that franchisees first open locations near airports — or on airport if financially viable — since the majority of Green Motion’s bookings come from international sources. Once the booking volume is stable at the airport location, Green Motion will help the franchisee develop in the local market with the opening of neighborhood locations, says Lowden.

Locations are opened using a methodical rollout. Reservations are taken months before the location is even opened, which allows Green Motion and the franchisee to understand the makeup of business coming in and allows the fleet to be tailored to the actual bookings. This also ensures higher utilization from day one, Lowden says.

Lowden describes the ideal franchisee candidate as “an entrepreneur with a desire and ability to experience rapid growth and a willingness to embrace Green Motion’s environmental commitment.”

Moreover, “The ideal franchisee,” he says, “is often with [car rental] experience, so you don’t have to teach them the process. But it’s also those who have developed to the point where their independent company won’t go any further.”

It’s a plus if candidates have experience in car rental but it’s not a must. For instance, the San Diego franchisee has travel and hospitality experience but no specific car rental experience. In these cases, a strong and experienced car rental management team is essential. The Green Motion Americas team assisted the San Diego franchisee in recruiting an experienced car professional who was able to assemble more than 20 staffers to launch the location in less than eight weeks, Lowden says.

Overall, Green Motion realizes its franchisee base comes from diverse backgrounds and successful businesses. “We don’t want to stifle the entrepreneurship of the franchisee,” says Lowden.

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