Does the Budget Rental System Agreement prohibit any specific actions by the franchisee?
Budget Franchise · 2025 FDDAnswer from 2025 FDD Document
ultimate parent, none of our officers own an interest in any supplier.
Designated and Approved Suppliers.
Your Budget Franchise must participate in Wizard, according to the Rental System Agreement. ABCR administers the Wizard System and is the only supplier of reservation and rental system services to Budget Franchises. ABCR also provides reservation and rental processing services using Wizard for Avis and the Avis Rent A Car business network. All of the fees and other revenues that ABCR currently receives from Budget Franchises for providing Wizard services are described in Item 6. During 2024, Wizard Services, Inc. received approximately $2,213,492.72 from providing reservation services to the Network (based on Wizard Service, Inc.'s internal unaudited financial records) which represents 1.13% of its total revenue of $195,045,351. Except as described in this Item, neither Budget nor its affiliates derive any revenue as a result of required purchases or leases of franchisees.
Budget requires you to execute the Rental System Agreement with ABCR, which agreement provides for all reservation and back office functionalities to your Budget Franchise. Under the Rental System Agreement you must buy certain hardware, software, and communications utilized in connecting to Wizard only from Approved Suppliers (see Item 11). In connection with a Thin Client infrastructure providing you with PCI compliant access to the Wizard System, the Thin Client Terminals must be purchased from an Approved Supplier through ABCR. The fee collected from you is forwarded to the supplier. (Schedule B to the Rental System Agreement and Schedule 4 of the Administrative Services Addendum). Additionally, the Site Surveys must be purchased only from Approved Suppliers.
Subject to Budget's approval, you may, and if Budget requires, you must, in addition to renting vehicles, sell or rent to your vehicle rental customers products and services directly related to your vehicle rental business. Budget may require you to sell or rent to your customers designated product brands and to obtain the products or services that you will sell to your customers only from designated or approved sources. Budget does not currently require you to sell any products or services other than Loss Damage Waiver, but may do so in the future. Unless you have a Budget Car Sales Addendum, you are not authorized to sell vehicles using Budget's Proprietary Marks.
You must purchase from us, Budget or our approved supplier, sequentially-numbered Standard Rental Agreement forms and jackets and additional driver forms for use in renting vehicles. Together these documents contain the terms and conditions of the rental contract, and the purchase of these documents from us and/or our approved supplier achieves uniformity and quality control for the System. The Standard Rental Agreement, a multipart form, is also designed to meet specifications for the Wizard System and the Avis Computer System (together "Wizard") and our audit requirements. We may derive revenue from selling Standard Rental Agreement forms and jackets and additional driver forms to you. Budget derives revenue from the sale of Standard Rental Agreement forms and jackets and additional driver forms to franchisees. For the fiscal year ending 2024, BRACS' revenues from the sale of Standard Rental Agreement forms and jackets and additional driver forms was approximately $759,909.46 of BRACS' total revenue, not including the Generic Rental Agreements.
In addition, you must purchase items that bear a Proprietary Mark or which are part of the System identity that meet our specifications as to style, color, design, etc. Examples of these items are stationery, signage, backwall counter modules, and uniforms. Precise product specifications exist for each of these items and are made available to franchisees. However, existing franchisees purchase most of these required items from the suppliers with which we have negotiated purchase contracts due to the better pricing and available supply.
Source: Item 22 — CONTRACTS (FDD pages 79–80)
What This Means (2025 FDD)
According to Budget's 2025 Franchise Disclosure Document, franchisees are restricted in several ways regarding the operation of their Budget franchise. Franchisees must participate in the Wizard system, using it for all locations, and must execute agreements with ABCR. They are required to purchase specific computer hardware, software, and communications equipment that is compatible with Wizard from Budget-designated or approved sources.
Budget franchisees are also obligated to adhere to rental rates set by Budget, including maximum rates. If Budget does not set rates but the franchisee communicates their decision to adhere to Budget's suggested rates, they must honor those rates. Franchisees must also honor rental rates established under the Corporate Rate Program for National Accounts as designated by Budget.
Furthermore, Budget franchisees are required to offer all products and services that Budget mandates and are prohibited from offering any products or services that Budget has not authorized. Unless they have a Budget Car Sales Addendum, franchisees are not authorized to sell vehicles using Budget's Proprietary Marks. These restrictions ensure uniformity and quality control across the Budget network, but they also limit the franchisee's autonomy in making independent business decisions.