What is Budget's right if a Budget licensee does not timely pay travel agency commissions?
Budget Franchise · 2025 FDDAnswer from 2025 FDD Document
If such commissions are not timely paid, Budget will have the right, but not the duty, to pay such commissions and bill Licensee for such commissions.
Should Licensee fail to pay travel agent commissions when due, Budget has the right to cease all reservations which Budget, or any third party, transmits to Licensee until all amounts due to Budget or any third party are paid in full.
Source: Item 23 — RECEIPTS (FDD pages 80–426)
What This Means (2025 FDD)
According to Budget's 2025 Franchise Disclosure Document, if a licensee fails to pay travel agency commissions on time, Budget has specific rights. Budget has the option, but not the obligation, to pay these commissions directly and then bill the licensee for the amount. Additionally, Budget can cease all reservations transmitted to the licensee by Budget or any third party until all outstanding amounts owed to Budget or any third party are paid in full. This policy ensures that travel agencies are paid promptly, maintaining good relationships and encouraging continued referrals.
Budget also has a centralized system for paying travel agents and other groups for referral business to licensees. Licensees are required to reimburse Budget for these amounts, including adhering to the terms of credit and incentive programs like frequent flyer or renter programs. This system is managed through the Budget Centralized Commission Services Program (BCCS), where ABCR acts on behalf of the licensee to process and pay for travel source reservations. The licensee must comply with the terms and conditions of this program and related policies.
To facilitate commission payments, Budget sends a monthly Composite Statement detailing the commissions paid on the licensee's behalf, including any special override/bonus payments and automatic commission payments resulting from the licensee's failure to respond to travel source inquiries. The licensee is required to pay Budget these charges within 45 days of the date of the Composite Statement. While Budget aims to ensure timely delivery of these statements, any delays do not shorten the reimbursement time requirement for the licensee. This comprehensive system ensures that travel agency commissions are managed efficiently and that licensees are held accountable for timely payments.
Budget also has an automatic payment system. Licensees are notified of travel source reservations lacking required information. If the licensee does not provide the necessary details (time, mileage, commission percentage, etc.) within a specified time, ABCR will pay the travel source commission based on estimated rental amounts. Licensees are expected to resolve commission complaints and issues to ensure payments are based on actual submissions before the automatic payments are triggered. A processing fee of $5.00 per reservation is assessed to cover administrative fees related to these automatic payments, which the licensee can avoid by timely reporting the status of commissionable reservations.