What sums are specifically excluded from the definition of 'Gross Revenue' for a Budget franchise?
Budget Franchise · 2025 FDDAnswer from 2025 FDD Document
The Budget License Agreement defines "Gross Revenue" as "any and all sums of every nature and character (whether in cash, credit, or otherwise) payable (collected or uncollected) under closed rental agreements, vehicle lease agreements, sublicense agreements, or otherwise, in Licensee's operation of its Rental Business including time, mileage, damage or loss waiver, insurance products, service fees, surcharges, and any other charges for any ancillary goods or services provided directly or indirectly in connection with Licensee's Rental Business, including baby seats, navigational devices, portable XM radios and/or DVD players, tire chains, locks, ropes, hitches, pads, boxes, portable lifts, and other products and services associated with loading, unloading, securing contents and packing trucks and cars, and specifically excluding only the following: (a) any national, state/province, or local sales or other similar taxes separately stated, collected from customers and paid by Licensee to the applicable airport authority; (b) any amounts received as insurance proceeds or otherwise for damage to vehicles or other property of Licensee, or for loss, conversion, or abandonment of such vehicles; (c) revenue derived from the sale of fuel furnished at the time of rental; and (d) customer facility fees ("CFC"), collected from customers and paid by Licensee to the applicable governmental authority."
Source: Item 6 — OTHER FEES(1) (FDD pages 17–29)
What This Means (2025 FDD)
According to Budget's 2025 Franchise Disclosure Document, the definition of 'Gross Revenue' specifically excludes certain sums. For a Budget franchisee, this means that not all income received is subject to franchise fees or royalty calculations. Understanding these exclusions is crucial for accurately calculating revenue and associated payments to Budget.
The following items are excluded from the calculation of Gross Revenue: (a) any national, state/province, or local sales or other similar taxes separately stated, collected from customers and paid by the Licensee to the applicable airport authority; (b) any amounts received as insurance proceeds or otherwise for damage to vehicles or other property of Licensee, or for loss, conversion, or abandonment of such vehicles; (c) revenue derived from the sale of fuel furnished at the time of rental; and (d) customer facility fees ("CFC"), collected from customers and paid by Licensee to the applicable governmental authority.
These exclusions provide a financial benefit to the franchisee, as they reduce the base upon which royalties and other fees are calculated. Franchisees should maintain accurate records to properly document these exclusions and ensure compliance with the Budget License Agreement. It is important for prospective franchisees to fully understand the definition of Gross Revenue and its exclusions to accurately project potential earnings and associated costs.