Are Budget Franchise owners required to contribute directly to Budget's advertising and promotion efforts?
Budget Franchise · 2025 FDDAnswer from 2025 FDD Document
d its designees may access all information and software on such systems and there is no limitation on such access. There are no contractual limits upon our access to your computer information.
Marketing and Advertising.
Budget conducts advertising and promotion at its own expense and at its sole discretion as described in Article V of the Budget License Agreement. Budget Franchise owners do not directly contribute to such advertising and promotion**.** However, Budget Franchisees may be asked to elect to participate in various types of Marketing Programs under a Participation Agreement. Budget may, at any time, increase, decrease, or eliminate its expenditures on advertising and promotion. Budget will pay the service providers directly and you must reimburse Budget for these costs.
There is no advertising council composed of franchisees.
Budget has sole control and discretion over these expenditures and the related advertising and promotion activities, including, without limitation, the creative concepts, materials, and endorsements used, and the geographic, market, and media placement and allocation of programs and activities. Advertising may appear in any form of media, and may be local, regional, or national in scope. Budget currently utilizes both in-house advertising personnel and outside advertising agencies to assist with marketing and promotion. In addition to the marketing fund referenced above, Budget currently applies a portion of the Reservation Fee toward expenses related to the promotion of budget.com and other reservation channels. This portion of the Reservation Fee does not constitute a contribution to any advertising or marketing fund by licensees and is not separately accounted for or reported.
You have no right, claim, or interest of any kind in or to any funds Budget allocates from those fees or with regard to Budget's funds generally. Budget's expenditures are intended to maximize recognition of Budget's Proprietary Marks and all rental locations operated by the Network. Budget's expenditures do not have to be proportionate or equivalent to the fees paid by licensees in a geographic area, and Budget has no obligation to ensure that you will benefit directly from its advertising and promotion expenditures. Budget is not obligated to spend any amount on advertising in your area or territory.
Budget has the following advertising and promotions expenditures during 2024: 79% on media placement (including television, tablet, in-airport signage, magazines, newspapers, search and display); 0% on production (production, fees, and fulfillment); and 21% on administrative expenses (Budget's personnel and general expenses). No amounts are spent for advertising that principally is a solicitation of prospective Budget Franchise owners. Franchisees may submit written requests to obtain an accounting of the marketing fees. The marketing fees are not audited. Currently, we do not charge a marketing fee to franchisees.
Budget may require that you spend $2,000 to $5,000 for grand opening promotions. Budget currently does not, but may require in the future that you spend an amount equal to 2% of the Gross Revenues of your Budget Franchise on local advertising annually. Budget has the right to review all advertising and promotional materials that you use prior to their use. Budget currently does not conduct regular reviews of each licensee's materials, but you are required to develop materials that are in good taste, are in compliance with the law, and comply with rules for Budget's Proprietary Marks and the Standards. You are not required to participate in any local or regional advertising cooperative (the Budget License Agreement, Article X).
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING (FDD pages 37–61)
What This Means (2025 FDD)
According to Budget's 2025 Franchise Disclosure Document, Budget Franchise owners do not directly contribute to Budget's advertising and promotion efforts. Budget conducts advertising and promotion at its own expense and discretion. However, Budget Franchisees may be asked to elect to participate in various types of Marketing Programs under a Participation Agreement. Budget may pay service providers directly and require franchisees to reimburse those costs.
Budget has sole control over advertising expenditures, including creative concepts, materials, endorsements, and the placement and allocation of programs. Advertising may appear in any form of media and may be local, regional, or national in scope. Budget uses both in-house personnel and outside advertising agencies for marketing and promotion. A portion of the Reservation Fee is applied toward expenses related to the promotion of budget.com and other reservation channels, but this does not constitute a contribution to any advertising or marketing fund by franchisees.
Budget may require franchisees to spend $2,000 to $5,000 for grand opening promotions. While Budget does not currently require it, they may in the future require franchisees to spend an amount equal to 2% of their Gross Revenues on local advertising annually. Budget has the right to review all advertising and promotional materials used by franchisees before they are used. Franchisees are not required to participate in any local or regional advertising cooperative.
Franchisees operating under the 1955 Agreement contribute to a national advertising campaign administered by the Advertising and Policy Committee. However, franchisees acquiring a license under the current franchise agreement will not be represented on this committee, nor will they benefit from its advertising. Budget has no obligation to support the advertising program administered under the 1955 Agreement and may conduct a separate national advertising program.