On what reservations are Reservation System Fees incurred for a Budget franchise?
Budget Franchise · 2025 FDDAnswer from 2025 FDD Document
lected from customers and paid by Licensee to the applicable governmental authority."
-
- The Reservation System Fees are imposed under the Rental System Agreement, which you must sign along with the Budget License Agreement. These fees are due for all reservations which are made for your Budget Franchise by customers, airlines, tour agencies, travel agents, Internet or e-commerce users, or otherwise through the reservation system during the preceding month. These fees are incurred on all reservations, including reservations that ABCR attempts to send to you but you fail to accept for any reason. You must pay these fees without any setoff or deduction of any kind. Budget collects all fees that the Rental System Agreement (and its exhibits) imposes.
-
- The Reservation Fee covers: (i) the operating expenses of the Reservation System, including expenses for the acquisition, maintenance, and enhancement of facilities, equipment, and personnel for the Reservation System; (ii) general overhead expenses in administering and processing reservations, which include the oversight of the operation, accounts payable processing, tax return preparation, internal audits, and partner and association expenses; (iii) administrative expenses in processing customer complaints (does not include amounts that Licensee must pay ABCR for resolving customer complaints); (iv) expenses related to the promotion of budget.com and other reservation channels and partnerships; and (v) reservations made by general consumers, tour licensees, or corporate customers who connect directly with the Reservation System.
-
- The Rental System Agreement imposes Budget Licensee Customer Adjustment Procedure. Under this Procedure, your Budget Franchise authorizes Budget's Customer Relations Department to resolve disputes at Budget's discretion between you and your customer and issue payments to the customer on your behalf up to the amount of the total rental charges to the Customer. The resolution amount is then charged to your Budget Franchise via the monthly Licensee Settlement Statement.
-
Source: Item 6 — OTHER FEES(1) (FDD pages 17–29)
What This Means (2025 FDD)
According to Budget's 2025 Franchise Disclosure Document, Reservation System Fees are incurred for all reservations made for a Budget franchise through the reservation system. This includes reservations made by customers, airlines, tour agencies, travel agents, Internet or e-commerce users, or other means. These fees apply regardless of whether ABCR (presumably Budget's reservation center) attempts to send a reservation to the franchisee, even if the franchisee fails to accept it for any reason.
Specifically, the Reservation Fee covers the operating expenses of the Reservation System, including the costs associated with acquiring, maintaining, and enhancing facilities, equipment, and personnel. It also includes general overhead expenses related to administering and processing reservations, such as oversight, accounts payable processing, tax return preparation, internal audits, and partner and association expenses. Furthermore, the fee covers administrative expenses for handling customer complaints, although it excludes amounts the franchisee must pay ABCR for resolving these complaints.
In addition, the Reservation Fee covers expenses related to promoting budget.com and other reservation channels and partnerships. It applies to reservations made by general consumers, tour licensees, or corporate customers who connect directly with the Reservation System. The fees are non-refundable and are uniformly imposed and collected by, and payable to, Budget. The franchisee must pay these fees without any deductions.
For a Budget franchisee, this means that they will be charged a fee for every reservation made through the Budget system, regardless of the source or whether the reservation is ultimately fulfilled. This fee contributes to the overall costs of operating the franchise and should be factored into the franchisee's financial planning. The franchisee should also be aware that these fees are subject to change and are outlined in the Rental System Agreement, which they must sign along with the Budget License Agreement.