In Illinois, when are the initial fees for a Budget franchise required to be paid?

According to Budget's 2025 Franchise Disclosure Document, franchisees in Illinois do not have to pay initial fees until Budget has fulfilled its pre-opening obligations to the franchisee and the franchisee has started business operations. This deferral of initial fees is a financial assurance requirement imposed by the Office of the Illinois Attorney General due to Budget's financial condition. This means that Budget cannot collect the initial franchise fee until it has met its obligations, such as providing training, site selection assistance, and other support outlined in the franchise agreement, and the franchisee has opened their Budget rental business. This provides some financial protection to the franchisee.

This requirement is specific to Illinois and is designed to protect franchisees, given Budget's financial situation. In other states, the initial franchise fee is typically due upon signing the franchise agreement. The Illinois Attorney General's intervention ensures that Budget must first invest in setting up the franchisee before receiving the initial fee, reducing the franchisee's risk.

For a prospective Budget franchisee in Illinois, this deferred payment of initial fees is a significant benefit. It reduces the upfront financial burden and ensures that Budget is committed to providing the necessary support to get the business operational before receiving payment. However, franchisees should still carefully review the franchise agreement to understand all obligations and potential costs associated with starting the franchise.