What are the key obligations outlined in the Budget Rental System Agreement?
Budget Franchise · 2025 FDDAnswer from 2025 FDD Document
incentive programs, which Budget may designate. Licensee will display any promotional programs, including special suggested rate promotions as a result of agreements Budget enters into with National Accounts. Licensee must provide service to the National Accounts in accordance with Budget's requirements. If Licensee fails to do so, in addition to other remedies available to Budget under this Agreement, Budget will have the right, without notice to Licensee, to provide (or license a third party, including a Related Entity, to provide) service to one or more National Accounts in the Territory.
6.2 Reservation and Rental Systems. Licensee agrees to: (a) participate in a reservation system (the "Reservation System"), which is now in effect, which may be modified or which may hereafter be instituted by Budget, in its sole discretion; (b) execute and comply with all of the terms and conditions of any rental system agreement with Budget or a Related Entity that Budget may designate in its sole discretion, or any amended or substitute agreement governing participation in the Reservation System (the "Reservation Agreement"); (c) accept and honor all reservations received through the Reservation System or otherwise from other Network operators, if required, and to transmit all reservations which it is requested to place by any customer to the appropriate Network operator, if required, without charge to the customer, and without fee to the receiving operator, other than as required by the Standards or the Reservation Agreement; (d) adhere to the rental rates that it places in, or has another place in, the Reservation System or any other reservation system; (e) if required by Budget in its sole discretion, execute and comply with all of the terms and conditions of the Rental System Agreement (the "Rental System Agreement") with a Related Entity designated by Budget; (f) reserve for Budget the right to require Licensee to connect to other designated reservation systems and process through such system all rental transactions entered into with customers in the Rental Business; and (g) reserve for Budget the right to require Licensee to use rental software from certain designated software providers in conjunction with the Reservation System or any other reservation system that Budget designates.
6.3 Customer Complaint Programs. Licensee shall comply with all of the terms and conditions of all then-current customer complaint programs as required by the Standards; the cost to administer the current program is included as part of the Reservation Fee. Further, Budget shall handle customer complaints subject to the Budget Licensee Customer Adjustment Procedure (the "Customer Adjustment Procedure"). Under the Customer Adjustment Procedure, Budget shall have the right to resolve disputes at Budget's discretion between Licensee and its customers and issue payments to customers on the Licensee's behalf. Budget shall have the right to charge back Licensee up to the amounts of the total rental charges incurred by the customer for the rental transaction. The resolution amount is billed to the Licensee's Composite Statement (as described in Paragraph 7.9).
6.4 Payment Programs. Licensee agrees to accept such credit cards, vouchers, tour vouchers and other forms of payment from its customers, and otherwise to participate in and comply with all of the terms and conditions of payment programs, as required by the Standards.
6.5 Inter-City Program. Licensee agrees to fully participate in and comply with all of the terms and conditions of the then-current Inter-City Program governing the use and movement of corporate and licensee Vehicles. Licensee will cooperate with other licensees of the System for the purposes of providing the highest quality customer service and efficient handling of business for the entire System. Licensee will assist in the repair and return of disabled vehicles of other System licensees and will handle inter-city drops in accordance with System policy.
6.6 Other Budget Programs. Licensee will subscribe to, participate in, and fully comply with any advertising campaign, sales promotion, operating program, procurement program, customer satisfaction program, marketing program, account program or experimental or test program which, in Budget's judgment, enhances brand awareness or other similar activities which Budget may prescribe in the Standards or otherwise or make available for or on behalf of the Network, including 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").
Source: Item 22 — CONTRACTS (FDD pages 79–80)
What This Means (2025 FDD)
According to Budget's 2025 Franchise Disclosure Document, franchisees have several key obligations under the Rental System Agreement. Budget franchisees must participate in Budget's reservation system, adhering to the terms outlined in the Rental System Agreement. This includes accepting reservations from the system and transmitting reservations to other network operators when required. Franchisees must also adhere to the rental rates they input into the reservation system. If required by Budget, franchisees must comply with the Rental System Agreement with a designated Related Entity. Additionally, Budget reserves the right to mandate that franchisees connect to other designated reservation systems and use specific rental software.
Budget franchisees are obligated to comply with customer complaint programs as required by the standards. Budget has the authority to handle customer complaints through the Customer Adjustment Procedure, resolving disputes and issuing payments on the franchisee's behalf, with the right to charge back the franchisee for the rental charges incurred, up to the total amount of the rental.
Upon termination of the Budget Rental System Agreement, franchisees have specific obligations. They must pay all outstanding fees, including license fees, the unpaid balance of the Initial License Purchase Fee, and any other monies owed to Budget or related entities. Franchisees also waive any right to offset these amounts with amounts they believe are owed to them. They must cease identifying themselves as a Budget licensee, discontinue using the Budget system, name, or marks, and return all manuals, standard rental agreements, and advertising materials. Franchisees must also transfer all telephone numbers, communication lines, and electronic addresses to Budget or its designee.