What was the amount of debt borrowings for Budget's international operations as of December 31, 2023?
Budget Franchise · 2025 FDDAnswer from 2025 FDD Document
e in compliance with the financial covenants governing our indebtedness.
14. Debt Under Vehicle Programs and Borrowing Arrangements
Debt under vehicle programs, including related party debt due to Avis Budget Rental Car Funding (AESOP) LLC ("Avis Budget Rental Car Funding"), consisted of: As of December 31,
| 2024 | 2023 | |
|---|---|---|
| (9) | S 14,14 | 3 $ 15,502 |
| Americas – Debt d |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 79)
What This Means (2025 FDD)
According to Budget's 2025 Franchise Disclosure Document, the debt borrowings for its international operations as of December 31, 2023, was $2,203 million. This figure reflects the amount of debt Budget has taken on to finance its international operations.
For a prospective franchisee, understanding the debt structure of the franchisor is crucial. A high level of debt could indicate financial instability, which might affect Budget's ability to support its franchisees. Conversely, strategic use of debt can fuel expansion and innovation, potentially benefiting franchisees through enhanced brand recognition and improved services.
It's important to note that this figure represents only the debt borrowings and does not include other forms of financing such as finance leases. Additionally, the FDD provides the weighted average interest rate on these international borrowings, which was 5.51% as of December 31, 2023. This interest rate gives insight into the cost of Budget's debt and can be used to assess the financial health and risk profile of the company.
Prospective franchisees should consider this debt information in conjunction with other financial metrics provided in the FDD, such as revenue, expenses, and profitability, to gain a comprehensive understanding of Budget's financial condition. It is also advisable to seek professional financial advice to interpret these figures in the context of their investment decision.