What right does Budget have regarding service contracts with governmental agencies and national accounts?
Budget Franchise · 2025 FDDAnswer from 2025 FDD Document
s, or in any area, which includes a particular licensee's territory. Budget will have no obligation to segregate any funds paid by Licensee to Budget which Budget plans to expend for advertising and promotion, nor will any such funds be deemed trust funds but rather will be deemed general funds of Budget.
- 5.3 International Directory. Budget may cause to be published an international directory listing the name and address of the Rental Business. The international directory may be published electronically.
PROGRAMS
- 6.1 National, Travel Programs and Other Account Participation. Budget will have the right to enter into service contracts with agencies and departments of the national, state/provincial, local and other governmental subdivisions; national and international industries and institutions; and other local, regional, national and international accounts (collectively, the "National Accounts"). Budget has the right to set minimum and maximum pricing to the extent permitted by law. Licensee agrees to accept reservations, abide by all terms and rates and maintain the availability of Vehicles for rent to such National Accounts. Licensee will service such National Accounts in the same manner as is required in this Agreement for other customers of Licensee or to provide such higher level of service for the National Account customers as required by the Standards, including maintaining and sharing with the Network information about the National Account and National Account customers. Subject to the provisions of Paragraph 9.15, Licensee agrees to comply with all of the terms and conditions of all National Account programs, as Budget may establish and modify, including rebates, damage waivers and liability insurance coverage.
Source: Item 23 — RECEIPTS (FDD pages 80–426)
What This Means (2025 FDD)
According to Budget's 2025 Franchise Disclosure Document, Budget retains the right to enter into service contracts with governmental agencies and national accounts. This includes agencies and departments of national, state/provincial, local, and other governmental subdivisions, as well as national and international industries, institutions, and other local, regional, national, and international accounts. Budget also has the right to set minimum and maximum pricing for these contracts, to the extent permitted by law.
As a Budget franchisee, you are obligated to accept reservations from these National Accounts, abide by the terms and rates set by Budget, and ensure that vehicles are available for rent to them. You must service these National Accounts in the same manner as other customers, or provide a higher level of service as required by Budget's standards. This includes maintaining and sharing information about the National Account and its customers with the Budget network. Franchisees must also comply with the terms and conditions of all National Account programs established by Budget, including those related to rebates, damage waivers, and liability insurance coverage, as outlined in Paragraph 9.15 of the franchise agreement.
Budget also requires franchisees to display any promotional programs, including special suggested rate promotions, resulting from agreements Budget makes with National Accounts. Franchisees must provide service to National Accounts according to Budget's requirements. If a franchisee fails to meet these service requirements, Budget has the right to provide the service directly or license a third party to do so, without notice to the franchisee. This could mean that Budget could take over servicing a major account in your territory if you don't meet their standards.
This arrangement ensures that Budget can maintain consistent service levels and pricing for its largest clients, which can be beneficial for brand reputation and overall network revenue. However, it also means that franchisees must adhere to Budget's terms and conditions for these accounts, potentially impacting their own pricing and service strategies. Franchisees should carefully review Paragraph 9.15 and other related sections of the franchise agreement to fully understand their obligations and the potential impact on their business.