How is the Automated Reservation Fee determined for Budget franchises?
Budget Franchise · 2025 FDDAnswer from 2025 FDD Document
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- Automated Reservation Fee. The Automated Reservation Fee will be determined in accordance with Schedule 3, as amended from time to time.
b. Third Party Automated Reservation Fee. This fee covers the reservation transmission fee for all reservations generated by third parties booked through their proprietary systems (also known as a Global Display System or "GDS" and referred to elsewhere in this Agreement as a "GDS") and processed through the Reservation System on Licensee's behalf. The current rates for this fee are indicated in Schedule 2 to Schedule F, which is attached hereto and incorporated herein by reference, and are subject to change as and to the extent that the GDS reservation fee rates that ABCR is required to pay changes.
- Year End Reconciliation. At the end of each calendar year, ABCR will prepare a profit and loss statement for the Reservation System, reconcile the applicable fees and expenses, and adjust such fees for the then current year including any retroactive adjustment to the beginning of the then current calendar year as follows:
Reservation Fee/Third Party Automated Reservation/Network Access/ Internet/Tour Direct Fees.
- (a) Credit Balance. If and to the extent the Reservation Fee, Third Party Automated Reservation, Network Access and Internet/Tour Direct Fees charged to all Budget licensees during the year exceed the corresponding expenses incurred during that year, the excess fees will be credited to the following year to offset future Reservation Fees and to reduce any increase in the Reservation Fee for such following year.
- (b) Deficit Balance. If and to the extent the Reservation Fee, Third Party Automated Reservation, Network Access and Internet/Tour Direct expenses incurred during the year exceed the total Reservation Fee, Third Party Automated Reservation, Network Access and Internet/Tour Direct Fees charged to all Budget licensees during the year, ABCR may recover the deficit amount by increasing the Reservation Fee upon 30 days written notice to the Licensee, subject to the limitations of Section II.1.(a) above.
Source: Item 23 — RECEIPTS (FDD pages 80–426)
What This Means (2025 FDD)
According to Budget's 2025 Franchise Disclosure Document, the Automated Reservation Fee is determined in accordance with Schedule 3 of Schedule F, and may be amended from time to time. This fee specifically covers the reservation transmission fee for reservations generated by third parties and booked through their proprietary systems, also known as a Global Display System (GDS). These reservations are then processed through Budget's Reservation System on the franchisee's behalf.
The rates for the Third Party Automated Reservation Fee are detailed in Schedule 2 of Schedule F, which is attached to and incorporated by reference in the FDD. These rates are subject to change based on any changes to the GDS reservation fee rates that Avis Budget Car Rental (ABCR) is required to pay.
At the end of each calendar year, ABCR will prepare a profit and loss statement for the Reservation System, reconcile the applicable fees and expenses, and adjust such fees for the then current year including any retroactive adjustment to the beginning of the then current calendar year. If the Third Party Automated Reservation Fees charged to all Budget licensees during the year exceed the corresponding expenses incurred during that year, the excess fees will be credited to the following year to offset future Reservation Fees and to reduce any increase in the Reservation Fee for such following year. If the opposite occurs, ABCR may recover the deficit amount by increasing the Reservation Fee upon 30 days written notice to the Licensee.