Does Budget or its affiliates derive any revenue as a result of required purchases or leases of franchisees, according to the Budget FDD?
Budget Franchise · 2025 FDDAnswer from 2025 FDD Document
ess 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.
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 does derive revenue from required purchases by franchisees. Specifically, 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 these forms was approximately $759,909.46 of BRACS' total revenue, not including the Generic Rental Agreements.
Budget franchisees are also required to participate in the Wizard system, and ABCR is the only supplier of reservation and rental system services. During 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. However, the FDD states that except as described in Item 8, neither Budget nor its affiliates derive any revenue as a result of required purchases or leases of franchisees.
Budget also requires franchisees to purchase certain hardware, software, and communications utilized in connecting to Wizard only from Approved Suppliers. In connection with a Thin Client infrastructure providing PCI compliant access to the Wizard System, the Thin Client Terminals must be purchased from an Approved Supplier through ABCR. The fee collected from the franchisee is forwarded to the supplier. Additionally, Site Surveys must be purchased only from Approved Suppliers. Franchisees are also required to purchase items that bear a Proprietary Mark or which are part of the System identity that meet Budget's specifications as to style, color, design, etc. Examples of these items are stationery, signage, backwall counter modules, and uniforms.
The FDD indicates that the purchases and leases from designated or approved suppliers or according to the Standards represent approximately 15% of a franchisee's total purchases and leases in establishing, and approximately 10% of their total purchases and leases in operating their Budget Franchise. Prospective franchisees should consider these required purchases and the associated costs when evaluating the Budget franchise opportunity.