Can Budget require a Licensee to connect to other designated reservation systems?
Budget Franchise · 2025 FDDAnswer from 2025 FDD Document
Licensee agrees to: (a) participate in a reservation system (the "Reservation System"), which is now in effect, which may be modified or which may hereafter be instituted by Budget, in its sole discretion; (b) execute and comply with all of the terms and conditions of any rental system agreement with Budget or a Related Entity that Budget may designate in its sole discretion, or any amended or substitute agreement governing participation in the Reservation System (the "Reservation Agreement"); (c) accept and honor all reservations received through the Reservation System or otherwise from other Network operators, if required, and to transmit all reservations which it is requested to place by any customer to the appropriate Network operator, if required, without charge to the customer, and without fee to the receiving operator, other than as required by the Standards or the Reservation Agreement; (d) adhere to the rental rates that it places in, or has another place in, the Reservation System or any other reservation system; (e) if required by Budget in its sole discretion, execute and comply with all of the terms and conditions of the Rental System Agreement (the "Rental System Agreement") with a Related Entity designated by Budget; (f) reserve for Budget the right to require Licensee to connect to other designated reservation systems and process through such system all rental transactions entered into with customers in the Rental Business; and (g) reserve for Budget the right to require Licensee to use rental software from certain designated software providers in conjunction with the Reservation System or any other reservation system that Budget designates.
Source: Item 23 — RECEIPTS (FDD pages 80–426)
What This Means (2025 FDD)
According to Budget's 2025 Franchise Disclosure Document, Budget has the right to require its licensees to connect to other designated reservation systems. Specifically, Budget can mandate that licensees process all rental transactions through these systems for customers in the Rental Business. This gives Budget significant control over the technology and systems used by franchisees.
This requirement means a prospective Budget franchisee must be prepared to integrate their operations with any reservation systems Budget designates, potentially incurring additional costs for software, hardware, or access fees. The franchisee must also use rental software from designated providers in conjunction with the Budget reservation system or any other reservation system that Budget designates. This is further reinforced in Paragraph 9.16, which states that the licensee agrees to purchase all components for, install, and implement all accounting, inventory control, sales register, reservations, security programs, and other computer hardware and software systems according to the Standards and as required under Paragraph 6.2.
Furthermore, the franchisee acknowledges that these systems may require purchasing, leasing, or licensing equipment, including hardware and software, and paying licensing, maintenance, or access fees to Budget, its affiliates, or others. The franchisee is obligated to install any new or modified systems within the timeframe specified by Budget, ensuring all computer hardware and software used is fully compatible with Budget's systems and strictly conforms to the established Standards. This level of control allows Budget to maintain consistency and potentially leverage better deals with technology providers, but it also reduces the franchisee's autonomy in choosing their own systems.