What happens to the transfer fee if the transfer does not conclude because Budget refuses to approve it?
Budget Franchise · 2025 FDDAnswer from 2025 FDD Document
the closing date of the transfer: - a. All amounts due Budget whether pursuant to the Budget License Agreement or otherwise; - b. All amounts due to other members of the Network, which Budget may, at its discretion, collect on behalf of those members; and - c. All amounts due any other creditors for products delivered, services rendered or otherwise, including but not limited to, taxes, travel agent commissions, phone bills, facility/location rent, airport concession fees, and other payables incurred in the conduct of the Rental Business as of the closing date of the transfer, which Budget may, at its discretion, collect on behalf of the creditor.
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- Provide all final documentation (i.e., corporate resolutions, lease and airport
Source: Item 23 — RECEIPTS (FDD pages 80–426)
What This Means (2025 FDD)
According to Budget's 2025 Franchise Disclosure Document, if a transfer does not conclude because Budget refuses to approve it, the transfer fee will be refunded to the transferring licensee. The standard transfer fee is $2,500, which may be adjusted for inflation based on the Consumer Price Index for all urban consumers (CPI-U).
In addition to the transfer fee, the transferring licensee is responsible for covering any out-of-pocket expenses Budget incurs during the transfer review and approval process. However, the FDD states that the out-of-pocket expenses recovered by Budget will not exceed $7,500. These expenses, if any, are payable upon the conclusion of the transfer.
This refund policy provides some financial protection to franchisees seeking to transfer their Budget franchise. If Budget ultimately denies the transfer, the franchisee will not be responsible for the transfer fee, though they may still be liable for Budget's out-of-pocket expenses if any were incurred during the review process. Franchisees should carefully document all expenses related to the transfer to ensure accurate accounting and potential refunds.