What is the maximum amount of out-of-pocket expenses that a transferring Budget licensee might have to pay to Budget during the transfer review and approval process?
Budget Franchise · 2025 FDDAnswer from 2025 FDD Document
of the closing date of the transfer: - a. All amounts due Budget whether pursuant to the Budget License Agreement or otherwise; - b. All amounts due to other members of the Network, which Budget may, at its discretion, collect on behalf of those members; and - c. All amounts due any other creditors for products delivered, services rendered or otherwise, including but not limited to, taxes, travel agent commissions, phone bills, facility/location rent, airport concession fees, and other payables incurred in the conduct of the Rental Business as of the closing date of the transfer, which Budget may, at its discretion, collect on behalf of the creditor.
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- Provide all final documentation (i.e., corporate resolutions, lease and airport
Source: Item 23 — RECEIPTS (FDD pages 80–426)
What This Means (2025 FDD)
According to Budget's 2025 Franchise Disclosure Document, a transferring licensee may have to pay out-of-pocket expenses incurred by Budget during the transfer review and approval process. The maximum amount for these out-of-pocket expenses is $7,500.00. These expenses, if any, are to be paid by the transferring licensee to Budget upon the conclusion of the transfer.
In addition to these out-of-pocket expenses, the transferring licensee is also responsible for a transfer fee of $2,500.00, which may be subject to CPI-U adjustments. However, this transfer fee is refundable if the transfer does not proceed due to Budget's refusal to approve it.
This means that a Budget franchisee considering a transfer needs to be prepared for up to $7,500 in potential out-of-pocket expenses, on top of the transfer fee, to cover Budget's costs in reviewing and approving the transfer. It is important to note that these are expenses incurred by Budget, and the franchisee will need to pay them regardless of whether the transfer is ultimately successful, provided that the reason for not concluding the transfer was not Budget's refusal to approve it.