What does 'Turnback' mean in the context of Budget's vehicle repurchases?

According to Budget's 2025 Franchise Disclosure Document, "Turnback" refers to a specific financial arrangement related to vehicle repurchases. It is defined as any preset price, premium, bonus, or formula that could result in Budget receiving more than the vehicle's fair market value when the original vendor, financier, or their designee repurchases the vehicle. The "fair market value" is defined as the vehicle's price listed in an industry-wide and generally accepted publication or directory of used car values, or the resale price received in a commercially reasonable sale.

This definition is important for Budget franchisees because it clarifies how vehicle values are determined in repurchase scenarios. It also highlights the potential for Budget to receive more than the fair market value, which could impact the franchisee's financial obligations or revenue sharing arrangements. Understanding this term is crucial for franchisees to accurately assess the financial implications of vehicle sales and repurchases within their Budget operations.

Furthermore, Budget is required to disclose any charges to renters related to loss of turnback, explaining what loss of turnback means and how it was calculated. This transparency is mandated to prevent misrepresentation of renter obligations and vehicle values in cases of loss or damage. The FDD also outlines specific penalties related to Turnback vehicles, such as penalties for renting a vehicle in Turnback status, especially if it leads to rejection from the manufacturer's repurchase program. These penalties can range from $200 to $500, depending on the outcome of the rental.

Custodial Cities (Avis Operators) are required to assist Owning locations with the Turnback of any eligible manufacturer program Vehicle to a Manufacturers Return Center (MRC). The Custodial City is responsible for not renting a Vehicle in Turnback or Wholesale Status and for returning the Vehicle to the MRC or Auction within fourteen (14) days of check-in, or status update in Wizard. The Owning City will pay the Custodial City a Preparation fee of forty-five dollars ($45), which includes shuttling to the Auction within twenty-five (25) miles.