When is the Initial License Purchase Fee for a Budget franchise fully earned by Budget?
Budget Franchise · 2025 FDDAnswer from 2025 FDD Document
those programs listed in the Summary Pages (Section 13), as such programs may be modified, replaced or instituted by Budget (including all other programs described in this Article VI, collectively, the "Programs"). Licensee agrees to support and service such Programs in accordance with the relevant provisions thereof, as required by the Standards, and to contribute to the expense thereof, if any, on the same basis as other similarly situated System licensees. Licensee may be required to enter into participation or other agreements to evidence its participation in such Programs.
FEES AND OTHER PAYMENTS
- 7.1 Initial License Purchase Fee. Licensee will pay to Budget an Initial License Purchase Fee for the right to become the Network licensee in the Territory in the amount set forth and in the manner identified in the Summary Pages (Section 10(a)) upon execution of this Agreement. Such fees are fully earned by Budget upon execution of this Agreement and are not refundable, in whole or in part, under any circumstances.
- 7.2 License Fees.
Source: Item 23 — RECEIPTS (FDD pages 80–426)
What This Means (2025 FDD)
According to Budget's 2025 Franchise Disclosure Document, the Initial License Purchase Fee is generally considered fully earned by Budget upon the execution of the License Agreement. This means that once the agreement is signed, Budget has earned the fee, and it becomes non-refundable under most circumstances. The specific amount and payment manner for this fee are detailed in the Summary Pages, Section 10(a) of the FDD.
However, there are exceptions to this general rule. For franchisees in Illinois and Washington, the payment of all initial fees is deferred until Budget has fulfilled its pre-opening obligations to the franchisee, and the franchisee's licensed business is open to the public. This deferral provides some financial assurance to new franchisees, ensuring that they don't pay the initial fee until Budget has met its initial obligations and the business is operational.
Prospective franchisees should carefully review Section 10(a) of the Summary Pages to understand the exact amount of the Initial License Purchase Fee and the specific payment terms. They should also be aware of the exceptions in Illinois and Washington, where the fee payment is deferred until certain conditions are met. It is important to clarify with Budget whether any other state-specific regulations might affect the payment or refundability of this fee.