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Cendant Corporation
Hospitality Franchise Systems
IndustryBusiness and consumer services
Defunct2012  OOjs UI icon edit-ltr-progressive.svg

Cendant Corporation was an American provider of business and consumer services, primarily within the real estate and travel industries. In 2005 and 2006, Cendant broke up and spun off or sold its constituent businesses. Although the company was based in New York City, the majority of Cendant's headquarters employees were located in Parsippany-Troy Hills, New Jersey.


The last CEO of Cendant was Henry Silverman.



Henry Silverman, a business executive and private equity investor created Hospitality Franchise Systems (HFS) as a vehicle to acquire a number of hotel franchises in the early 1990s. Among Silverman's purchases were such brands as Ramada and Howard Johnson's as well as Days Inn, which he was able to buy for $290 million (less than half what he had sold it for) after the company had filed for bankruptcy in 1991. Silverman quickly took Hospitality Franchise Systems public in a 1992 IPO.

HFS was among the fastest growing companies of its size in the 1990s and the company's stock had risen from its IPO price of $4 per share to $77 per share by 1998. The company made a brief foray into the casino industry, but then spun off that business in November 1994 as National Gaming. [1] In 1996, HFS purchased Sierra On-Line and Davidson & Associates for $2.2 billion. Also in 1996, HFS acquired Avis Rent a Car. [2] In 1998 HFS purchased the Jackson Hewitt tax preparation company (which was spun off as a separate company in 2004). However, in 1998, Silverman led HFS into what would prove a disastrous merger with CUC International, a direct marketing company that operated Shoppers Advantage and Travelers Advantage (now part of Affinion Group). The $14 billion merger of HFS and CUC resulted in the formation of Cendant Corporation, which was formed in December 1997. Also, as part of the merger, Silverman announced he would reduce his day-to-day involvement with the company and assume the company's chairmanship in preference of CUC's founder and CEO Walter Forbes.

Accounting Scandal

Just months after the merger, in April 1998 Cendant uncovered massive accounting improprieties at CUC which resulted in one of the largest financial scandals of the 1990s. At the time, Vice Chairman E. Kirk Shelton was reported to have inflated the company's revenue by $500 million over a period of three years. He had reported a 1997 net income of $55.4 million when the true 1997 result was a net loss of $217.2 million. As these irregularities in the books of Cendant were discovered in early 1998, an audit committee set up by Cendant's Board of Directors launched an investigation and discovered that the former management team of CUC, including its top executives Walter Forbes and Kirk Shelton, had been fraudulently preparing false business statements for several years.[ citation needed ] When this report was released to the public, the resulting damage to the market value for the company was approximately $14 billion, with their stock tumbling from a high of $41 down to nearly $12. At the time, this fiasco was the largest case of accounting fraud in the country's history. After the accounting scandal was uncovered, Silverman and the Cendant board forced Forbes’ resignation and Silverman assumed the CEO post.

In March 2001, Forbes and Shelton were indicted by a federal grand jury and sued by the Securities and Exchange Commission, which accused the company of directing the massive accounting fraud that ultimately cost the company and its investors billions of dollars. Shelton served 8 of his 10-year prison sentence before being released early for exemplary behavior. Former CEO Walter Forbes was sentenced to 12 years in prison in 2007.

Under Silverman, Cendant bounced back from the accounting scandal far outperforming the markets in the early 2000s.


Following the fraud debacle, the entire interactive software branch was sold for $1 billion to French publisher Havas in 1998, the same year Havas was purchased by Vivendi.

In 2002, Cendant purchased Budget Rent a Car. [3]

Early in 2004, Cendant acquired the trademark rights to the Ramada brand in the United States, where there were 819 franchised properties. It also acquired the Canadian rights. [4] On September 15, 2004, Cendant purchased the Ramada International Hotels & Resorts unit from Marriott International. At the time, this was primarily a franchised brand of 204 hotels operating in 26 countries and territories.

On September 29, 2004, Cendant purchased Orbitz for $1.2 billion. [5]

In early 2005, Cendant purchased ebookers for just under £190 million. Later in the year, Cendant acquired London based Gullivers Travel Associates.


On October 23, 2005, Cendant Corporation announced its decision to split into four separate companies, citing a necessity to diversify in appealing to stockholders and in an attempt to increase the value of the post-split up company. These four categories include "Real Estate, Travel Distribution, Hospitality and Vehicle Rental Companies." [6]

Cendant originally decided to spin off its Travel Distribution division as a separate company called Travelport, but on June 30, 2006, Cendant announced the sale of Travelport to an affiliate of the privately held Blackstone Group for $4.3 Billion. This sale closed on August 23, 2006.

During the autumn of 2005, Progeny Marketing Innovations and Trilegiant were sold to private equity group Apollo Management. They changed their name in January 2006 to Affinion Group.

On July 31 of 2006, both the Cendant Real Estate division as well as the Cendant Hospitality division were spun off and became separate companies under the names Realogy and Wyndham Worldwide, respectively. Realogy was subsequently bought by Apollo.

The Cendant Car Rental Group, which owns Avis, Budget Rent A Car and Budget Truck Rental rental companies, became the sole remaining company under the Cendant name. The company changed its name to Avis Budget Group and the Cendant name has been completely retired.

Former shareholders of Cendant received as a dividend for each share of Cendant common stock held on the dividend distribution date 1/4 share of common stock of Realogy, 1/5 share of common stock of Wyndham Worldwide and the remaining shares were subject to a reverse split resulting in shareholders receiving 1 share of Avis Budget Group for each 10 shares of Cendant previously held.

Former brands

Automobile rentals

Cendant owned the rental brands of Avis and Budget, holding these properties in the CCRG (Cendant Car Rental Group). Avis and Budget operate a shared fleet of cars, and have the same "back end" system, but operate at different locations, offer different service levels, and have somewhat different pricing. After the Cendant name was dissolved, the car rental segment became known as Avis Budget Group and currently trades on the NASDAQ stock exchange under the ticker symbol CAR.

Hotel franchises

These brands were spun off into Wyndham Worldwide.

Real estate franchises

These companies are now under the Realogy banner.

Membership programs

These companies are now under the Affinion Group banner.

Travel services

These brands were separated into a new company called Travelport.

Timeshare companies

These companies are owned by Wyndham Worldwide.

Vacation network groups

Related Research Articles

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Jackson Hewitt Tax Service Inc. is the second-largest tax-preparation service in the United States; responsible for preparing over 2 million federal, state, and local income-tax returns each year.

Ramada Large hotel chain run by Wyndham Hotels & Resorts

Ramada is a large American multinational hotel chain owned by Wyndham Hotels and Resorts. As of December 31, 2018, it operates 811 hotels with 114,614 rooms across 63 countries under the Ramada brand.

Ramada International

Ramada International is the company that owns, operates, and franchises hotels using the Ramada name outside of the United States and Canada. Ramada International was formerly owned by Marriott International, a competitor of Cendant, which owned Ramada in the United States and Canada. In 2004, however, Cendant purchased Ramada International from Marriott, which gives Cendant worldwide rights to the Ramada name. Despite now being under the same ownership, Ramada and Ramada International remained separate entities. In 2006, the hotels and hospitality divisions of Cendant were spun off into Wyndham Worldwide.

AmeriHost Inn

AmeriHost Inn was a small chain of hotels located in the United States and Canada. The chain consisted of two- or three-story interior-corridor buildings constructed based on the company's prototype designs. Properties were usually a long, two- or three-story building with a gabled or lobby and public area at one end. All properties featured indoor pools and consistent amenities, which was the chain's main selling point. Founded in 1989 by (now) Arlington Hospitality, Cendant Corporation purchased the franchise rights in the late 1990s. Arlington continued to build and develop AmeriHost Inns using the prototype it originally created for the chain during this time. However, Cendant granted a small number of AmeriHost franchises to existing properties that do not conform to the original prototype standards, during the start of the millennium.

CUC (Comp-U-Card) International Inc. was a membership-based consumer services conglomerate with travel, shopping, auto, dining, home improvement and financial services offered to more than 60 million customers worldwide based out of Stamford, Connecticut and founded by Kirk Shelton and Walter Forbes. In 1998, it became involved in a Securities and Exchange Commission investigation into what, at the time, was the biggest accounting scandal in corporate history.

Avis Car Rental American car rental company

Avis is an American car rental company headquartered in Parsippany, New Jersey, United States. Avis, Budget Rent a Car, Budget Truck Rental and Zipcar are all units of Avis Budget Group.

Budget Rent a Car U.S. car rental company

Budget Rent a Car System, Inc. is an American car rental company that was founded in 1958 in Los Angeles, California by Morris Mirkin. Budget's operations are headquartered in Parsippany, New Jersey.

Travelodge refers to several hotel chains around the world. Current operations include: the United States, Canada, the United Kingdom, Spain, Ireland, New Zealand, Australia and Asia. However, many of these are operated by independent companies who have no connection with the brand in other countries. As of December 31, 2018, it has 435 properties with 31,005 rooms.

Century 21 Real Estate LLC is an American real estate agent franchise company founded in 1971. The system consists of approximately 9,400 independently owned and operated franchised broker offices in 80 countries and territories worldwide with over 127,000 sales professionals. Century 21 Real Estate is headquartered in Madison, New Jersey.

Coldwell Banker company

Coldwell Banker Real Estate LLC is an American real estate franchise owned by Realogy, with headquarters in Madison, New Jersey. It was founded in 1906 in San Francisco, and has approximately 3,000 offices in 49 countries and territories. It publishes an annual house price guide, Home Listing Report.

Wyndham Hotels and Resorts is an international hotel and resort chain based in the United States. It has locations in China, Canada, Mexico, Colombia, Ecuador, Turkey, Germany, the UK, the Caribbean, the UAE, Indonesia, India, Saudi Arabia and Margarita Island in Venezuela. On June 1, 2018, Wyndham Worldwide spun-off Wyndham Hotels & Resorts as its own company, and Wyndham Worldwide was renamed Wyndham Destinations. As of December 31, 2019, it has 9,280 hotels, including two that are owned by the company.

Renaissance Hotels Luxury 5-Star Hotel

Renaissance Hotels is a luxury hotel brand of Marriott International. It was founded in 1981 as Ramada Renaissance, an upscale brand of Ramada Inns. In 1989 the brand was relaunched as Renaissance Hotels. It was bought by Marriott in 1997. As of December 31, 2018, it has 175 hotels with 55,099 rooms.

Knights Inn American hotel chain

Knights Inn is a full-limited service hotel chain owned by Red Lion Hotels Corporation and based in Denver, Colorado. Knights Inn used to be built with all-exterior corridors and medieval-inspired architecture, but the chain now has updated options for all Knights Inn properties. The Knights Inn brand is now spun off for a fresh new start with Red Lion Hotels.

Wyndham Destinations is an American timeshare company. Wyndham Destinations, headquartered in Orlando, Florida, operates several hotel brands around the world. It is the holding company for RCI and other lodging brands. It was spun off from Cendant Corporation in July 2006. On June 1, 2018, Wyndham Worldwide spun-off Wyndham Hotels and Resorts as its own company, and renamed their organization to Wyndham Destinations.

Realogy Holdings Corp. is an American publicly owned real estate and relocation services company. It owns and franchises several real estate brands and brokerages, and offers relocation, title and settlement services.

Avis Budget Group American rental car company

Avis Budget Group, Inc. is the American parent company of Avis Car Rental, Budget Car Rental, Budget Truck Rental, Payless Car Rental, Apex Car Rentals, Maggiore Group and Zipcar. The company's headquarters are located in Parsippany, New Jersey, United States.

Budget Truck Rental

Budget Truck Rental, LLC is the second largest truck rental company in the continental United States, with around 2,800 locations and 32,000 trucks across the country. Budget Truck Rental is owned and operated by Avis Budget Group, which was spun off from Cendant.

One Equity Partners is the private merchant banking arm of JPMorgan Chase, focused on leveraged buyout and growth capital investments in middle-market companies. Formed at Bank One in 2001, the group has offices in New York City, Chicago, Sao Paulo, Vienna, Hong Kong and Frankfurt. It manages approximately $10 billion of investments and capital commitments by JPMorgan Chase. In 2014, it was announced that J.P Morgan was to sell of half of its stake in One Equity Partners.

Avis Europe British car rental company

Avis Europe plc is a United Kingdom-based company which holds the licence to operate the two main vehicle rental brands of Avis Budget Group in Europe, the Middle East and Africa as well as Asia in the case of Avis. In 2011 it was acquired by Avis Budget Group.

Henry R. Silverman is an American entrepreneur and private equity investor. Silverman is best known for his role in building Cendant Corporation into a multibillion-dollar business services company that provided car rentals, travel reservation services as well as real estate brokerage services and was also the largest franchisor of hotels globally.


  1. purchased .com/redir/default.aspx?P=sa&an=dj00000020011101dqba0239r&cat=a&ep=ASE "Hospitality Franchise: Sees trading symbol of 'NAGC'" Check |url= value (help). Dow Jones News Service. November 10, 1994.  via Factiva (subscription required)
  2. McDowell, Edwin (1996-07-02). "HFS Will Acquire Employee-Controlled Avis for $800 Million in Cash andStock". The New York Times. ISSN   0362-4331 . Retrieved 2018-07-21.
  3. "Cendant cutting hotels, strikes deal for Budget". tribunedigital-chicagotribune. Retrieved 2018-07-21.
  4. http://www.thestreet.com/_tsclsii/markets/marketfeatures/10183077.html Archived 2004-10-29 at the Wayback Machine , Retrieved on 2009-02-24.
  5. http://www.informationweek.com/showArticle.jhtml?articleID=48800113, Retrieved on 2009-02-24.
  6. http://www.cendant.com/media/pr/press_release.cgi/Corporate/11948, Retrieved on 2009-02-24.