What was the final settlement amount that Budget paid in the Kirit Bakshi case?
Budget Franchise · 2025 FDDAnswer from 2025 FDD Document
es of Budget that are offering franchises under the "Budget" trademark.
Kirit Bakshi v. ABCR Avis Budget Group, et als. – (United States District Court for the Eastern District of Michigan, Case No. 2:20-cv-10419-DML-MJH) On February 18, 2020, Plaintiff filed a complaint alleging violations of the Michigan Consumer Protection Act, California Unfair Business Practices (Bus. & Prof. Code Section 17200) and the New Jersey Consumer Fraud Act. Plaintiff alleges ABG/Costco fraudulently, uniformly, routinely and systematically imposed unauthorized and/or specifically declined charges on the credit and/or debit cards of their rental customers across the Country. The plaintiff's original complaint was dismissed for failure to plead an amount in controversy ($75k)
sufficient for federal court jurisdiction. Later, the plaintiff failed to file an amended complaint in a timely manner which could have led to a formal dismissal of the complaint by the court. On August 27, 2020, the pro se plaintiff filed an order to show cause ("OTSC") claiming he was not aware of the court's prior order dismissing his claim. The parties settled this case on De
Source: Item 3 — LITIGATION (FDD pages 12–16)
What This Means (2025 FDD)
According to Budget's 2025 Franchise Disclosure Document, the Kirit Bakshi case was settled on December 2, 2022, for $20,000, and the case was closed on December 14, 2022. The plaintiff in this case alleged violations of the Michigan Consumer Protection Act, California Unfair Business Practices, and the New Jersey Consumer Fraud Act, claiming that ABG/Costco fraudulently imposed unauthorized charges on rental customers' credit and debit cards. The original complaint was initially dismissed due to the plaintiff's failure to plead an amount in controversy that met the federal court jurisdiction threshold of $75,000. However, the plaintiff later filed an order to show cause, and the parties eventually reached a settlement.
This settlement indicates that Budget, like many large franchise systems, can face legal challenges related to consumer protection laws and business practices. Even if a case is initially dismissed, it can still lead to a settlement. For a prospective franchisee, this highlights the importance of adhering to fair and transparent business practices to avoid potential legal issues and financial liabilities. It also underscores the need to understand and comply with consumer protection laws in the states where they operate.
While a $20,000 settlement may not be a substantial amount for a large corporation like Budget, it represents a cost that franchisees should be aware of. Such costs can accumulate over time and affect the overall profitability of the franchise system. Furthermore, these legal matters can also impact the brand's reputation, which can indirectly affect a franchisee's business. Therefore, understanding the types of legal challenges Budget has faced in the past can help a franchisee better prepare for potential issues and implement best practices to mitigate risks.