If a Non-Owned Vehicle is rented to a city without an operating location, what financial obligations does the Renting City have to the Owning City under the Budget franchise agreement?

According to Budget's 2025 Franchise Disclosure Document, if a Non-Owned Vehicle is rented to a city without an operating location, the Renting City has specific financial obligations to the Owning City. The Renting City is required to pay the Owning City one hundred percent (100%) of the rental revenue generated from the rental. In addition to the rental revenue, the Renting City is also responsible for covering all costs associated with the vehicle's safekeeping and its return to an authorized Budget location. These costs include, but are not limited to, fuel costs, storage costs, transfer fees, and shuttler wages.

This policy ensures that the Owning City is fully compensated for the use of its vehicle and that all expenses related to the vehicle's return are covered. For a prospective Budget franchisee, this means that if they rent a vehicle to a location without a Budget presence, they must be prepared to remit all rental revenue and cover all associated costs to the Owning City. This could impact the profitability of such rentals, as the Renting City does not retain any of the rental revenue and must also manage the logistics and expenses of returning the vehicle.

It is important for franchisees to understand these inter-city rental policies to avoid unexpected costs and maintain good relationships with other Budget franchisees. Franchisees should also ensure they have systems in place to accurately track and remit the required payments and manage the vehicle return process efficiently. This level of detail in the FDD helps prospective franchisees understand the financial implications of inter-city rentals and the importance of adhering to Budget's policies.