Is Budget obligated to ensure that advertising expenditures in a geographic area are proportionate to the fees paid by Budget licensees in that area?
Budget Franchise · 2025 FDDAnswer from 2025 FDD Document
Budget undertakes no obligation to ensure that its expenditures in or affecting any geographic area will be proportionate or equivalent to the License Fees or any other fees paid by licensees operating in that geographic area.
Budget does not guarantee that any licensee will benefit directly from Budget's advertising and promotion expenditures, nor does Budget guarantee the distribution of advertising in any quantity or format, to or for any particular licensee or licensees, or in any area, which includes a particular licensee's territory.
Budget will have no obligation to segregate any funds paid by Licensee to Budget which Budget plans to expend for advertising and promotion, nor will any such funds be deemed trust funds but rather will be deemed general funds of Budget.
Source: Item 23 — RECEIPTS (FDD pages 80–426)
What This Means (2025 FDD)
According to Budget's 2025 Franchise Disclosure Document, Budget is not obligated to ensure that advertising expenditures in any geographic area are proportionate or equivalent to the license fees or any other fees paid by licensees operating in that area. Budget's advertising expenditures, if any, are intended to maximize recognition of the Marks and patronage of all Rental Businesses and may be used to support experimental or test programs and programs that, in the judgment of Budget, will enhance brand awareness.
Budget does not guarantee that any licensee will benefit directly from Budget's advertising and promotion expenditures, nor does Budget guarantee the distribution of advertising in any quantity or format, to or for any particular licensee or licensees, or in any area, which includes a particular licensee's territory. Furthermore, Budget has no obligation to segregate any funds paid by the Licensee to Budget which Budget plans to expend for advertising and promotion, nor will any such funds be deemed trust funds but rather will be deemed general funds of Budget.
This means that as a Budget franchisee, you cannot expect advertising dollars to be spent in direct proportion to the fees you pay. Budget has sole discretion over how and where advertising funds are spent, and there is no guarantee that your specific location or territory will directly benefit from these expenditures. This is a common practice in franchising, where advertising is often managed centrally to benefit the brand as a whole, rather than individual locations.