Can a Budget franchisee deduct or set off any amounts from the Reservation System Fees?
Budget Franchise · 2025 FDDAnswer from 2025 FDD Document
ding reservations that ABCR attempts to send to you but you fail to accept for any reason. You must pay these fees without any setoff or deduction of any kind. Budget collects all fees that the Rental System Agreement (and its exhibits) imposes.
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- The Reservation Fee covers: (i) the operating expenses of the Reservation System, including expenses for the acquisition, maintenance, and enhancement of facilities, equipment, and personnel for the Reservation System; (ii) general overhead expenses in administering and processing reservations, which include the oversight of the operation, accounts payable processing, tax return preparation, internal audits, and partner and association expenses; (iii) administrative expenses in processing customer complaints (does not include amounts that Licensee must pay ABCR for resolving customer complaints); (iv) expenses related to the promotion of budget.com and other reservation channels and partnerships; and (v) reservations made by general consumers, tour licensees, or corporate customers who connect directly with the Reservation System.
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- The Rental System Agreement imposes Budget Licensee Customer Adjustment Procedure. Under this Procedure, your Budget Franchise authorizes Budget's Customer Relations Department to resolve disputes at Budget's discretion between you and your customer and issue payments to the customer on your behalf up to the amount of the total rental charges to the Customer. The resolution amount is then charged to your Budget Franchise via the monthly Licensee Settlement Statement.
Source: Item 6 — OTHER FEES(1) (FDD pages 17–29)
What This Means (2025 FDD)
According to Budget's 2025 Franchise Disclosure Document, franchisees are required to pay Reservation System Fees without any deductions or setoffs. These fees are incurred on all reservations, including those that ABCR (presumably Avis Budget Car Rental) attempts to send to the franchisee but are not accepted for any reason.
Reservation System Fees are imposed under the Rental System Agreement, which franchisees must sign along with the Budget License Agreement. These fees are due for all reservations made for the Budget franchise through various channels such as customers, airlines, tour agencies, travel agents, internet users, or otherwise through the reservation system during the preceding month.
The Reservation Fee covers the operating expenses of the Reservation System, including expenses for the acquisition, maintenance, and enhancement of facilities, equipment, and personnel; general overhead expenses in administering and processing reservations; administrative expenses in processing customer complaints; expenses related to the promotion of budget.com and other reservation channels and partnerships; and reservations made by general consumers, tour licensees, or corporate customers who connect directly with the Reservation System. This means that franchisees cannot reduce the amount they owe for these fees, regardless of any disputes or other financial considerations.