Besides the transfer fee, what other expenses is the transferring licensee responsible for paying to Budget during the transfer review and approval process?
Budget Franchise · 2025 FDDAnswer from 2025 FDD Document
the closing date of the transfer: - a. All amounts due Budget whether pursuant to the Budget License Agreement or otherwise; - b. All amounts due to other members of the Network, which Budget may, at its discretion, collect on behalf of those members; and - c. All amounts due any other creditors for products delivered, services rendered or otherwise, including but not limited to, taxes, travel agent commissions, phone bills, facility/location rent, airport concession fees, and other payables incurred in the conduct of the Rental Business as of the closing date of the transfer, which Budget may, at its discretion, collect on behalf of the creditor.
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- Provide all final documentation (i.e., corporate resolutions, lease and airport
Source: Item 23 — RECEIPTS (FDD pages 80–426)
What This Means (2025 FDD)
According to Budget's 2025 Franchise Disclosure Document, in addition to the transfer fee, the transferring licensee is responsible for paying any and all out-of-pocket expenses incurred by Budget during the transfer review and approval process. However, the total out-of-pocket expenses recovered by Budget will not exceed $7,500. These expenses, if any, are to be paid by the transferring licensee to Budget upon the conclusion of the transfer.
It's important to note that the transfer fee is $2,500, and this amount may be subject to CPI-U adjustments. If the transfer does not conclude due to Budget's refusal to approve it, no transfer fee is due, and any transfer fee already paid will be refunded.
This means that a franchisee looking to transfer their Budget franchise needs to be prepared to cover not only the $2,500 transfer fee (plus potential inflation adjustments) but also any additional out-of-pocket expenses Budget incurs during the review. While these additional expenses are capped at $7,500, they can still represent a significant cost, especially if the transfer process is complex or requires extensive legal and administrative work by Budget. Franchisees should factor these potential costs into their financial planning when considering a franchise transfer.