In Illinois, is a Budget franchisee expected to finance 100% of their vehicle fleet, and what security and guarantees are required?
Budget Franchise · 2025 FDDAnswer from 2025 FDD Document
Illinois law applies.
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- Budget expects that YOU will finance 100% of your vehicle fleet. YOU must provide security for any loan you obtain and personally guarantee any financing. This Guarantee will place your personal assets (perhaps including your house) at risk if your franchise fails.
Source: Item 23 — RECEIPTS (FDD pages 80–426)
What This Means (2025 FDD)
According to Budget's 2025 Franchise Disclosure Document, franchisees in Illinois are expected to finance 100% of their vehicle fleet. This means that Budget does not provide financing for the vehicles needed to operate the rental business.
Furthermore, Budget requires franchisees to provide security for any loans obtained to finance the vehicle fleet. Franchisees must also personally guarantee the financing. This personal guarantee is a significant risk, as it puts the franchisee's personal assets, potentially including their home, at risk if the franchise fails.
This requirement is not uncommon in the franchise industry, particularly in capital-intensive businesses like car rentals. However, prospective Budget franchisees in Illinois should carefully consider the financial implications of financing 100% of their vehicle fleet and providing personal guarantees, and seek professional financial advice before making a decision.