Is the Budget Initial License Purchase Fee refundable?
Budget Franchise · 2025 FDDAnswer from 2025 FDD Document
Initial License Purchase Fees are not uniform and not refundable under any circumstances.
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- 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.
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- Initial License Purchase Fee. Notwithstanding anything contrary in Section 7.1, the payment of all initial fees is deferred until Budget has satisfied its pre-opening obligations to Franchisees under the License Agreement and Franchisee's Licensed Business opens to the public.
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All fees paid to Budget as a part of your initial investment are not refundable.
Source: Item 5 — INITIAL FEES (FDD page 16)
What This Means (2025 FDD)
According to Budget's 2025 Franchise Disclosure Document, the Initial License Purchase Fee is generally not refundable. Item 5 states that the Initial License Purchase Fees are "not refundable under any circumstances." Item 23 reinforces this by stating that these fees "are not refundable, in whole or in part, under any circumstances." This means that once the Budget License Agreement is signed and the fee is paid, a franchisee cannot get a refund of this fee, regardless of the circumstances.
Item 7 also notes that "All fees paid to Budget as a part of your initial investment are not refundable." This further emphasizes the non-refundable nature of the initial fees paid to Budget. However, it does clarify that the refundability of fees paid to outside suppliers and third parties depends on the arrangements made with them, meaning those fees might be refundable based on separate agreements.
Item 23 provides an exception related to the timing of the Initial License Purchase Fee. It states, "the payment of all initial fees is deferred until Budget has satisfied its pre-opening obligations to Franchisees under the License Agreement and Franchisee's Licensed Business opens to the public." While the fee itself remains non-refundable, this deferred payment structure offers some protection to the franchisee, as they are not required to pay the fee until Budget has fulfilled its pre-opening responsibilities and the business is ready to open.