Does Budget or its affiliates act as approved suppliers for Budget franchisees, and if not, what is the exception?
Budget Franchise · 2025 FDDAnswer from 2025 FDD Document
rvice, Inc.'s internal unaudited financial records) which represents 1.13% of its total revenue of $195,045,351. Except as described in this Item, neither Budget nor its affiliates derive any revenue as a result of required purchases or leases of franchisees.
Budget requires you to execute the Rental System Agreement with ABCR, which agreement provides for all reservation and back office functionalities to your Budget Franchise. Under the Rental System Agreement you must buy certain hardware, software, and communications utilized in connecting to Wizard only from Approved Suppliers (see Item 11). In connection with a Thin Client infrastructure providing you with PCI compliant access to the Wizard System, the Thin Client Terminals must be purchased from an Approved Supplier through ABCR. The fee collected from you is forwarded to the supplier. (Schedule B to the Rental System Agreement and Schedule 4 of the Administrative Services Addendum). Additionally, the Site Surveys must be purchased only from Approved Suppliers.
Subject to Budget's approval, you may, and if Budget requires, you must, in addition to renting vehicles, sell or rent to your vehicle rental customers products and services directly related to your vehicle rental business. Budget may require you to sell or rent to your customers designated product brands and to obtain the products or services that you will sell to your customers only from designated or approved sources. Budget does not currently require you to sell any products or services other than Loss Damage Waiver, but may do so in the future. Unless you have a Budget Car Sales Addendum, you are not authorized to sell vehicles using Budget's Proprietary Marks.
You must purchase from us, Budget or our approved supplier, sequentially-numbered Standard Rental Agreement forms and jackets and additional driver forms for use in renting vehicles. Together these documents contain the terms and conditions of the rental contract, and the purchase of these documents from us and/or our approved supplier achieves uniformity and quality control for the System. The Standard Rental Agreement, a multipart form, is also designed to meet specifications for the Wizard System and the Avis Computer System (together "Wizard") and our audit requirements. We may derive revenue from selling Standard Rental Agreement forms and jackets and additional driver forms to you. Budget derives revenue from the sale of Standard Rental Agreement forms and jackets and additional driver forms to franchisees. For the fiscal year ending 2024, BRACS' revenues from the sale of Standard Rental Agreement forms and jackets and additional driver forms was approximately $759,909.46 of BRACS' total revenue, not including the Generic Rental Agreements.
In addition, you must purchase items that bear a Proprietary Mark or which are part of the System identity that meet our specifications as to style, color, design, etc. Examples of these items are stationery, signage, backwall counter modules, and uniforms. Precise product specifications exist for each of these items and are made available to franchisees. However, existing franchisees purchase most of these required items from the suppliers with which we have negotiated purchase contracts due to the better pricing and available supply. Modifications to existing specifications and standards are communicated to franchisees through bulletins and revisions to the Manual.
Collectively, the purchases and leases you will make from designated or approved suppliers or according to the Standards represent approximately 15% of your total purchases and leases in establishing, and approximately 10% of your total purchases and leases in operating your Budget Franchise. Except as described in this Item, Budget currently provides no material benefits (like renewal rights or granting additional franchises) to licensees for using designated, approved, or recommended sources.
Currently, except as described above, there are no other goods, services, supplies, fixtures, equipment, inventory, computer hardware or software, or real estate relating to the establishment or operation of your Budget Franchise that you must purchase or lease from Budget, a Budget affiliate, or suppliers that Budget designates or approves. Except as described above in this Item, neither Budget nor its affiliates are approved suppliers for any items or services for your Budget Franchise. However, during the license term Budget may require you to purchase additional items only from suppliers it designates or approves (which might include or be limited to Budget or its affiliates).
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 32–34)
What This Means (2025 FDD)
According to Budget's 2025 Franchise Disclosure Document, Budget or its affiliates are generally not approved suppliers for Budget franchisees, with some exceptions. Franchisees are required to participate in the Wizard system, and ABCR is the only supplier of reservation and rental system services. ABCR also provides these services for Avis. In 2024, Wizard Services, Inc. received approximately $2,213,492.72 from providing reservation services to the Network, which represents 1.13% of its total revenue of $195,045,351.
Budget franchisees must buy certain hardware, software, and communications utilized in connecting to Wizard only from Approved Suppliers. Thin Client Terminals must be purchased from an Approved Supplier through ABCR. Site Surveys must also be purchased only from Approved Suppliers. Franchisees must purchase sequentially-numbered Standard Rental Agreement forms and jackets and additional driver forms from Budget or its approved supplier. For the fiscal year ending 2024, BRACS' revenues from the sale of Standard Rental Agreement forms and jackets and additional driver forms was approximately $759,909.46 of BRACS' total revenue, not including the Generic Rental Agreements.
Budget may require franchisees to sell or rent designated product brands and to obtain these products or services only from designated or approved sources. Franchisees must also purchase items that bear a Proprietary Mark or which are part of the System identity that meet Budget's specifications, such as stationery, signage, backwall counter modules, and uniforms. These purchases and leases from designated or approved suppliers represent approximately 15% of the total purchases and leases in establishing, and approximately 10% of the total purchases and leases in operating a Budget Franchise.
Budget may require franchisees to purchase additional items only from suppliers it designates or approves, which might include or be limited to Budget or its affiliates. If a franchisee wants to use any item that Budget has not yet evaluated or buy from a supplier that Budget has not yet approved, they must submit sufficient information for Budget to determine whether the item complies with the Standards or the supplier meets Budget's criteria. Budget currently charges no fee for product or supplier evaluation, but may do so in the future. Budget will approve or reject the product or supplier within a reasonable time (typically 30 days).