Does Budget bear the cost of inspections of a Budget Rental Business?
Budget Franchise · 2025 FDDAnswer from 2025 FDD Document
So long as Licensee is not in default of any provision of this Agreement, Budget will have the right, not more than two (2) times per calendar year, after giving at least five (5) days prior written notice to Licensee, to send representatives to inspect the Rental Business, and to audit the books and records thereof, to determine the quality thereof and the faithfulness of Licensee's compliance with the provisions of this Agreement and the Standards.
Budget will bear the cost of all such inspections.
Notwithstanding the preceding sentence, if such inspection
discloses that Licensee has failed to comply with any provision of this Agreement or the Standards in a manner that would permit Budget to terminate this Agreement pursuant to Paragraphs 11.3 or 11.4, Licensee shall bear the cost of such inspection, including normal daily compensation, traveling expenses, room and board.
Source: Item 23 — RECEIPTS (FDD pages 80–426)
What This Means (2025 FDD)
According to Budget's 2025 Franchise Disclosure Document, Budget will bear the cost of inspections of a Budget Rental Business under certain conditions. Budget has the right to inspect the Rental Business up to two times per calendar year, provided they give the Licensee at least five days prior written notice, as long as the Licensee is not in default of any provision of the agreement.
However, if an inspection reveals that the Licensee has failed to comply with any provision of the agreement or standards in a manner that would allow Budget to terminate the agreement, the Licensee will bear the cost of the inspection. This includes normal daily compensation, travel expenses, and room and board for the inspectors.
This means that as a Budget franchisee, you can expect Budget to cover the costs of routine inspections as long as you are in compliance with the franchise agreement. However, it is crucial to maintain compliance to avoid bearing the costs of inspections triggered by potential defaults, which could include significant expenses.