What operating expenses are covered by the Reservation Fee that a Budget licensee pays?
Budget Franchise · 2025 FDDAnswer from 2025 FDD Document
nless mutually acceptable mailing arrangements have previously been arranged) (the "Composite Statement Date"). Licensee will pay to ABCR all amounts contained within the Composite Statement, including any late fees, administrative fees and or any contested fees that have not been resolved as further described below, within forty-five (45) days of the Composite Statement Date. Licensee will have forty-five (45) days from the Composite Statement Date, to contest and adequately address any charges or credits on the Composite Statement in accordance with the Standards (as defined in the License Agreement) (the "Review Period"). Licensee agrees that any changes or credits not properly contested or addressed within the Review Period will be considered final, due and payable to ABCR per the License Agreement and this Agreement. Licensee agrees that ABCR, at its sole discretion, will first apply any payments that it receives to the oldest balances first and that ABCR may modify the Review Period or any of the Standards relating to the Composite Statement upon written notice to the Licensee. - a. Reservation Fee. This fee is attributable to reservation operating expenses, which include reservations incoming from phone/GDS equipment, phone calls or internet/direct link reservations, including from budget.com. This fee also covers the operating expenses of the Reservation System, including expenses for the acquisition, maintenance and enhancement of facilities, equipment, personnel, marketing, customer relations and corporate overhead for the Reservation System. A list of the current total Reservation Fees are specified in Schedule F, which is attached hereto and incorporated herein by
reference. These expenses may be periodically adjusted to compensate for any increase or decrease in actual cost.
- b. Third Party Automated Reservation Fee.
Source: Item 23 — RECEIPTS (FDD pages 80–426)
What This Means (2025 FDD)
According to Budget's 2025 Franchise Disclosure Document, the Reservation Fee covers a range of operating expenses related to the reservation system. These expenses include the costs associated with processing reservations that come in through phone systems, GDS equipment, internet, or direct links, including those from budget.com. The fee also covers the costs of maintaining and improving the reservation system itself, including expenses related to facilities, equipment, personnel, marketing, customer relations, and corporate overhead.
Schedule F of the FDD provides a detailed breakdown of these operating expenses. These include reservation processing costs such as computer processing charges and reports, In Watts, automated reservation processing charges, Out Watts, telex and telephone charges, terminal depreciation, network maintenance, telephony hardware, and transborder reservation adjustments. The Reservation Fee also covers advertising, marketing, and promotion expenses, such as frequent renter programs, yellow pages advertising, worldwide directory productions, and third-party reservation promotions.
Furthermore, the Reservation Fee covers occupancy costs for contact centers, including rent, utilities, repairs, and equipment rental and depreciation. It also includes personnel costs related to recruiting and training, salaries and wages, and taxes and fringe benefits for employees involved in the reservation system. Finally, the fee covers general and administrative expenses associated with the operation of the reservation system.
Budget may adjust these fees periodically to account for increases or decreases in actual costs. At $4.10 per reservation, this fee also includes corporate overhead expenses, promotional expenses for budget.com, and customer complaint service expenses. Licensees should review Schedule F carefully to understand the full scope of expenses covered by the Reservation Fee and how these fees may be adjusted over time.