Under what agreement are the Reservation System Fees imposed on a Budget franchisee?
Budget Franchise · 2025 FDDAnswer from 2025 FDD Document
lected from customers and paid by Licensee to the applicable governmental authority."
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- The Reservation System Fees are imposed under the Rental System Agreement, which you must sign along with the Budget License Agreement. These fees are due for all reservations which are made for your Budget Franchise by customers, airlines, tour agencies, travel agents, Internet or e-commerce users, or otherwise through the reservation system during the preceding month. These fees are incurred on all reservations, including reservations that ABCR attempts to send to you but you fail to accept for any reason. You must pay these fees without any setoff or deduction of any kind. Budget collects all fees that the Rental System Agreement (and its exhibits) imposes.
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- The Reservation Fee covers: (i) the operating expenses of the Reservation System, including expenses for the acquisition, maintenance, and enhancement of facilities, equipment, and personnel for the Reservation System; (ii) general overhead expenses in administering and processing reservations, which include the oversight of the operation, accounts payable processing, tax return preparation, internal audits, and partner and association expenses; (iii) administrative expenses in processing customer complaints (does not include amounts that Licensee must pay ABCR for resolving customer complaints); (iv) expenses related to the promotion of budget.com and other reservation channels and partnerships; and (v) reservations made by general consumers, tour licensees, or corporate customers who connect directly with the Reservation System.
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Source: Item 6 — OTHER FEES(1) (FDD pages 17–29)
What This Means (2025 FDD)
According to Budget's 2025 Franchise Disclosure Document, the Reservation System Fees are imposed on franchisees under the Rental System Agreement. The document specifies that franchisees must sign this agreement along with the Budget License Agreement. These fees apply to all reservations made for a franchisee's location through various channels, including customers, airlines, tour agencies, travel agents, the internet, or any e-commerce platform utilizing the reservation system.
Budget franchisees are responsible for these fees for all reservations, even those that ABCR (presumably Budget's reservation center) attempts to send but the franchisee fails to accept. The fees must be paid without any deductions or setoffs. Budget collects all fees outlined in the Rental System Agreement and its exhibits.
The Reservation Fee covers a range of expenses related to the reservation system. These include the operational costs of the system, such as acquiring, maintaining, and improving facilities, equipment, and personnel. The fees also cover general overhead expenses for administering and processing reservations, including oversight, accounts payable, tax preparation, internal audits, and partner/association expenses. Additionally, the Reservation Fee covers administrative costs for handling customer complaints, although it excludes amounts the franchisee must pay ABCR for resolving these complaints. Finally, the fee covers expenses related to promoting budget.com and other reservation channels, as well as reservations made by general consumers, tour licensees, or corporate customers who connect directly with the Reservation System.