Is a Budget licensee obligated to comply with rental rates set by Budget for National Accounts?

According to Budget's 2025 Franchise Disclosure Document, a licensee is generally obligated to comply with rental rates set by Budget for National Accounts. Specifically, the licensee must adhere to all rental rates set by Budget for National Accounts, including association discounts and corporate rates. However, there is an exception: licensees are allowed to impose surcharges on these rates for their locations if such surcharges have been negotiated with the National Accounts or are otherwise permitted under Budget pricing policies to compete with additional suppliers of the National Accounts. This obligation is established upon the execution of the License Agreement.

This requirement ensures consistency and standardization in pricing for National Accounts across all Budget locations, which can be beneficial for maintaining brand reputation and attracting large corporate clients. However, it also means that licensees have limited flexibility in setting prices for these accounts, potentially impacting their revenue depending on local market conditions and operating costs. The ability to impose surcharges under certain conditions provides some degree of flexibility for licensees to address local market factors or specific agreements with National Accounts.

It is important for prospective Budget franchisees to understand the implications of this requirement and to carefully evaluate the potential impact on their profitability. They should also inquire about the specific terms and conditions of National Account programs, including any limitations on surcharges or other pricing adjustments. Understanding Budget's pricing policies and the negotiation process for surcharges with National Accounts is crucial for making informed business decisions. Franchisees should also be aware that Budget has the right to modify these programs, which could affect their obligations and revenue potential.