Must a Budget franchisee execute a Rental System Agreement if required by Budget?
Budget Franchise · 2025 FDDAnswer from 2025 FDD Document
Licensee agrees to: (a) participate in a reservation system (the "Reservation System"), which is now in effect, which may be modified or which may hereafter be instituted by Budget, in its sole discretion; (b) execute and comply with all of the terms and conditions of any rental system agreement with Budget or a Related Entity that Budget may designate in its sole discretion, or any amended or substitute agreement governing participation in the Reservation System (the "Reservation Agreement"); (c) accept and honor all reservations received through the Reservation System or otherwise from other Network operators, if required, and to transmit all reservations which it is requested to place by any customer to the appropriate Network operator, if required, without charge to the customer, and without fee to the receiving operator, other than as required by the Standards or the Reservation Agreement; (d) adhere to the rental rates that it places in, or has another place in, the Reservation System or any other reservation system; (e) if required by Budget in its sole discretion, execute and comply with all of the terms and conditions of the Rental System Agreement (the "Rental System Agreement") with a Related Entity designated by Budget
Source: Item 23 — RECEIPTS (FDD pages 80–426)
What This Means (2025 FDD)
According to Budget's 2025 Franchise Disclosure Document, a franchisee is required to execute a Rental System Agreement if Budget requires it. Specifically, the franchisee must comply with the terms and conditions of the Rental System Agreement with a Related Entity designated by Budget, should Budget require it in its sole discretion.
This means that as a Budget franchisee, you may be obligated to enter into a separate agreement related to the rental system with an entity affiliated with Budget. This agreement would govern your participation in the rental system and could impose additional obligations and fees. The decision to require this agreement rests solely with Budget.
Prospective franchisees should carefully consider the implications of this requirement. It is important to understand the potential obligations and costs associated with the Rental System Agreement, as well as the nature of the 'Related Entity' involved. It would be prudent to discuss this requirement with Budget during the due diligence process to gain a clear understanding of when and why this agreement might be required and what it entails.