For a Budget franchise, what is specifically excluded from the definition of 'Gross Revenue'?
Budget Franchise · 2025 FDDAnswer from 2025 FDD Document
The term "Gross Revenue" will, for purposes of this Agreement, mean any and all sums of every nature and character (whether in cash, credit or otherwise) payable (collected or uncollected) under closed rental agreements, vehicle lease agreements, sublicense agreements, or otherwise, in Licensee's operation of its Rental Business including time, mileage, damage or loss waiver, insurance products, service fees, surcharges and any other charges for any ancillary goods or services provided directly or indirectly in connection with Licensee's Rental Business, including baby seats, navigational devices, portable XM radios and/or DVD players, tire chains, locks, ropes, hitches, pads, boxes, portable lifts, and other products and services associated with loading, unloading, securing contents and packing trucks and cars and specifically excluding only the following: (a) any national, state/province or local sales or other similar taxes separately stated, collected from customers and paid by Licensee to the applicable airport authority; (b) any amounts received as insurance proceeds or otherwise for damage to vehicles or other property of Licensee, or for loss, conversion or abandonment of such vehicles; (c) revenue derived from the sale of fuel furnished at the time of rental; and (d) customer facility fees ("CFC"), collected from customers and paid by Licensee to the applicable governmental authority.
Source: Item 23 — RECEIPTS (FDD pages 80–426)
What This Means (2025 FDD)
According to Budget's 2025 Franchise Disclosure Document, the term 'Gross Revenue' encompasses all sums payable under rental agreements, vehicle lease agreements, sublicense agreements, or otherwise, in the operation of the Rental Business. This includes payments made in cash, credit, or other forms, whether collected or uncollected. Gross revenue also includes time, mileage, damage or loss waiver, insurance products, service fees, surcharges, and any other charges for ancillary goods or services provided directly or indirectly in connection with the Rental Business, such as baby seats, navigational devices, portable XM radios and/or DVD players, tire chains, locks, ropes, hitches, pads, boxes, portable lifts, and other products and services associated with loading, unloading, securing contents and packing trucks and cars.
However, the following items are specifically excluded from the definition of Gross Revenue for a Budget franchise: any national, state/province or local sales or other similar taxes separately stated, collected from customers and paid by the Licensee to the applicable airport authority; any amounts received as insurance proceeds or otherwise for damage to vehicles or other property of the Licensee, or for loss, conversion or abandonment of such vehicles; revenue derived from the sale of fuel furnished at the time of rental; and customer facility fees (CFC), collected from customers and paid by the Licensee to the applicable governmental authority.
For a prospective franchisee, understanding what constitutes 'Gross Revenue' is crucial because it directly impacts the calculation of fees owed to Budget. By excluding items like sales taxes, insurance proceeds, fuel revenue, and customer facility fees, the franchise agreement ensures that franchisees are not paying royalties on revenues that are simply pass-through costs or reimbursements. This exclusion can lead to a more accurate and fair calculation of royalties, potentially reducing the financial burden on the franchisee. Franchisees should carefully review these exclusions to ensure proper accounting and reporting, as inaccuracies could lead to disputes with Budget.