Does the Budget License Agreement limit the class of vehicles a Budget Franchise may rent?
Budget Franchise · 2025 FDDAnswer from 2025 FDD Document
Budget requires you to rent, and you are authorized to rent, only those types of motor vehicles that Budget specifies (see Item 8).
Budget currently does not, by any restriction or condition, limit you regarding the make or model of automobiles that you offer to rent (although it may impose these restrictions or conditions in the future). The Budget License Agreement limits the class of vehicles your Budget Franchise may rent (for example, you may not rent trucks, which definition excludes SUVs of any size, crossovers, passenger vans of any occupancy, and smaller than medium duty pickup trucks. In addition, you may not rent motorcycles, snow mobiles, all-terrain vehicles (ATVs), bicycles, horse-drawn vehicles, or other similar vehicles under the "Budget" name without Budget's consent). The Budget License Agreement and the Standards regulate age and other standards of quality regarding the automobiles you offer for rental or sale.
Source: Item 16 — RESTRICTIONS ON WHAT THE FRANCHISEE MAY SELL (FDD pages 65–66)
What This Means (2025 FDD)
According to Budget's 2025 Franchise Disclosure Document, the Budget License Agreement does place limits on the classes of vehicles a franchisee can rent. While Budget does not currently restrict the make or model of automobiles, they retain the right to impose such restrictions in the future.
Specifically, the agreement prohibits Budget franchisees from renting certain types of vehicles without Budget's consent. These include trucks (excluding SUVs of any size, crossovers, passenger vans, and smaller than medium duty pickup trucks), motorcycles, snowmobiles, all-terrain vehicles (ATVs), bicycles, and horse-drawn vehicles. The Budget License Agreement and the Standards regulate age and other standards of quality regarding the automobiles offered for rental or sale.
This restriction means a prospective franchisee needs to be aware of the specific vehicle types they are permitted to rent under the Budget License Agreement. Diversifying into prohibited vehicle classes would require Budget's explicit consent. This limitation could impact a franchisee's potential revenue streams and target customer base, as they cannot cater to customers seeking to rent these vehicle types under the Budget brand.