What section of the FDD outlines Budget's policies regarding travel agency commissions?
Budget Franchise · 2025 FDDAnswer from 2025 FDD Document
In addition to the Reservation Fees payable to Budget or one of its Related Entities, Licensee will pay to certain, but not all, third party travel agencies the then-current Global Distribution System Fees ("GDS") identified in the Summary Pages (Section 10(e)).
- 7.5 Travel Agency Commissions.
Licensee will participate in all Budget-approved programs for the centralized payment of travel agency commissions, will comply with Budget rules and regulations relating thereto, and will ensure that all such commissions are promptly paid in accordance with System policy.
Currently, travel agency commissions are identified in the Summary Pages (Section 10(f)).
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, Item 23, Receipts, outlines the policies regarding travel agency commissions. Specifically, section 7.5 states that franchisees must participate in Budget-approved programs for centralized payment of travel agency commissions and comply with all related rules, ensuring prompt payment according to System policy. The current travel agency commissions are identified in the Summary Pages, Section 10(f). Budget has the right, but not the duty, to pay commissions and bill the franchisee if they are not paid timely. Budget can also cease all reservations transmitted to the franchisee until all due amounts are paid.
Furthermore, the commission calculation policy involves paying travel sources a percentage of net time and mileage charges. Leisure business earns 10%, while contracted business, including corporate accounts with less than $100,000 in revenue, earns 5%. Corporate accounts generating over $100,000 in annual revenue do not earn commissions. Budget may also select individual or groups of travel sources for unique, non-standard commission arrangements as part of promotions or programs, processed through BCCS, with compensation calculated in various ways.
The commission percentages described are mandatory and subject to review and revision by Budget. Franchisees must not deviate from these percentages. Budget also offers an Override/Bonus Program through BCCS, allowing eligible travel sources to earn bonuses by achieving preset business goals for the Budget system. These preferred accounts may also be eligible for special bonus marketing funds through joint marketing promotions with Budget. The primary difference between the base commission schedule and the Override/Bonus Program is that the override/bonus is based on achieving preset targets for business directed to Budget U.S. properties as a whole, not on a property-by-property calculation.
Budget also has an automatic payment system for commissions. Licensees are notified of travel source reservations lacking required information. If the licensee does not submit the required information (time, mileage, commission percentage, and whether the reservation was canceled, a duplicate, or a no-show) after a specified time, ABCR will pay the travel source commission based on estimated rental amounts. Licensees are expected to resolve travel source commission complaints and issues before the automatic commission payments are triggered. Budget can reject submissions with time and mileage calculations or no-show items that vary significantly from averages or historical data. A processing fee of $5.00 per reservation is assessed to cover administrative fees related to automatic commission payments, which can be avoided by timely reporting the status of commissionable reservations.