What is the initial system service charge per transaction that a Budget licensee pays to ABCR?
Budget Franchise · 2025 FDDAnswer from 2025 FDD Document
- As consideration for ABCR's processing Transactions in Wizard and providing Licensee access to the System, Licensee will initially pay to ABCR a service charge of $.574 per Transaction (the "Service Charge"). ABCR will bill Licensee monthly for Transactions executed during the prior month. Commencing on the first January 1st after the execution of this Agreement
and on each January 1st thereafter during the term of this Agreement, the Service Charge may be increased or decreased by ABCR to reflect any increases or decreases in ABCR's cost of operating the System, which costs include, among other things, outsource provider fees, internal and consultant labor costs, System maintenance and upgrades, network charges and software amortization costs.
Source: Item 23 — RECEIPTS (FDD pages 80–426)
What This Means (2025 FDD)
According to Budget's 2025 Franchise Disclosure Document, Budget licensees will initially pay ABCR a service charge of $0.574 per transaction for processing transactions in Wizard and providing access to the system. ABCR will bill the licensee monthly for transactions executed during the prior month.
Commencing on the first January 1st after the execution of the agreement and on each January 1st thereafter during the term of the agreement, this service charge may be adjusted by ABCR. These adjustments will reflect any increases or decreases in ABCR's cost of operating the system. These costs include outsource provider fees, internal and consultant labor costs, system maintenance and upgrades, network charges, and software amortization costs.
This means that while the initial charge is set at $0.574 per transaction, Budget franchisees should anticipate potential changes to this fee annually, based on ABCR's operational costs. It is important for prospective franchisees to factor in these potential fluctuations when forecasting expenses and profitability. Understanding the components that influence these adjustments, such as labor and maintenance costs, can help franchisees better anticipate and manage their financial planning.