What is Budget required to do with Large Capacity Vehicles purchased or leased after the Effective Date of the Agreement?
Budget Franchise · 2025 FDDAnswer from 2025 FDD Document
Licensee agrees to use Vehicle models in the conduct of the Rental Business as prescribed by Budget in the Standards, and in Paragraph 8.1 and in the Summary Pages (Section 11) or otherwise in writing. Licensee agrees that it will use or keep for use at least the minimum number of Vehicles shown in Summary Pages (Section 11). Licensee shall maintain all Vehicles used in the conduct of the Rental Business in clean, safe and presentable condition and in conformity with all applicable safety and operating laws, regulations, rules and standards in accordance with manufacturer's recommendations (including the timely facilitation of any recalls), standards promulgated by governmental authorities and standards contained in the Manual, as revised. Licensee shall abide by the standards regarding model type, year and mileage as recommended under the Standards, as revised, Licensee shall not keep any Vehicle in its inventory of Vehicles for the Rental Business beyond the lesser of twenty-four (24) months or forty-five thousand (45,000) miles. The classification of Vehicles used in the Rental Business shall be made in accordance with the Rental System Agreement (Exhibit E), which Budget reserves the right to amend. Licensee agrees to adhere to such classifications. Budget will have the right to impose Standards for all Vehicles, equipment, signs, materials and supplies used by Licensee in the Rental Business and to require that any such Vehicle or item be purchased exclusively from suppliers approved by Budget, which might include or be limited to Budget or one or more of the Related Entities.
Source: Item 23 — RECEIPTS (FDD pages 80–426)
What This Means (2025 FDD)
Based on the 2025 Budget Franchise Disclosure Document, the excerpt provided does not specify Budget's requirements regarding Large Capacity Vehicles purchased or leased after the agreement's effective date. The document does outline general vehicle requirements for Budget franchisees.
Specifically, Budget requires franchisees to use vehicle models as prescribed in the Standards, Paragraph 8.1, and Summary Pages (Section 11). Franchisees must also maintain at least the minimum number of vehicles as specified in Summary Pages (Section 11). All vehicles must be kept in clean, safe, and presentable condition, adhering to all applicable safety and operating laws, regulations, rules, standards, manufacturer's recommendations, governmental standards, and the standards outlined in the Manual.
Furthermore, Budget dictates standards for vehicle model type, year, and mileage. Franchisees cannot keep a vehicle in their rental fleet for more than 24 months or 45,000 miles, whichever comes first. Vehicle classifications must align with the Rental System Agreement (Exhibit E), which Budget can amend. Budget also has the right to set standards for all vehicles and equipment and can mandate that franchisees purchase these items exclusively from Budget-approved suppliers, including Budget itself or its related entities.
To fully understand Budget's obligations and any specific requirements related to Large Capacity Vehicles, a prospective franchisee should directly ask Budget for clarification. This will ensure they are fully informed about vehicle-related standards and obligations.