How often can Budget inspect a Budget licensee's Rental Business if the licensee is not in default?
Budget Franchise · 2025 FDDAnswer from 2025 FDD Document
- 9.17 Inspection.
So long as Licensee is not in default of any provision of this Agreement, Budget will have the right, not more than two (2) times per calendar year, after giving at least five (5) days prior written notice to Licensee, to send representatives to inspect the Rental Business, and to audit the books and records thereof, to determine the quality thereof and the faithfulness of Licensee's compliance with the provisions of this Agreement and the Standards.
Once Licensee receives a notice of default under Paragraph 11.3, whether or not cured, Budget will have the right and without prior notice to Licensee, to so inspect the Rental Business and to so audit the books and records thereof, including running a credit or D&B check.
Budget will bear the cost of all such inspections.
Notwithstanding the preceding sentence, if such inspection
discloses that Licensee has failed to comply with any provision of this Agreement or the Standards in a manner that would permit Budget to terminate this Agreement pursuant to Paragraphs 11.3 or 11.4, Licensee shall bear the cost of such inspection, including normal daily compensation, traveling expenses, room and board.
Source: Item 23 — RECEIPTS (FDD pages 80–426)
What This Means (2025 FDD)
According to the 2025 Budget Franchise Disclosure Document, Budget has the right to inspect a licensee's rental business up to two times per calendar year, provided the licensee is not in default of any agreement provisions. Budget must give the licensee at least five days prior written notice before conducting an inspection. These inspections are to determine the quality of the business and the licensee's compliance with the agreement and Budget's standards.
This means that as long as a Budget franchisee is meeting their obligations under the franchise agreement, Budget can still conduct routine inspections. These inspections are limited to twice a year and require advance notice, giving the franchisee time to prepare. Budget bears the cost of these inspections unless the inspection reveals non-compliance that could lead to termination, in which case the franchisee bears the cost.
This clause ensures that Budget can maintain quality control and adherence to brand standards across all franchise locations, while also providing franchisees with some protection against excessive or unannounced intrusions. The franchisee benefits from knowing the inspections are limited and require notice, allowing them to maintain a good working relationship with Budget while also running their business effectively.