Under what circumstances is a Budget Custodial City responsible for all damage to a Non-Owned Vehicle, not to exceed book value?

According to Budget's 2025 Franchise Disclosure Document, a Custodial City is responsible for all damage to a Non-Owned Vehicle, up to the book value, if the vehicle is improperly used. Additionally, the Custodial City is responsible for all damage, not exceeding book value, originating from theft, unauthorized shuttling, fire, unauthorized employee use, or damage from failure to perform Preventative Maintenance (PM), except for damage resulting from Acts of God.

This means that as a Budget franchisee operating a Custodial City, you will be financially liable for damages to vehicles owned by other Budget locations under specific circumstances. Improper use of a non-owned vehicle could be interpreted broadly, so it's important to understand what Budget considers "improper use".

The book value of a vehicle is based on the Owning City's actual cost, including any rebates and taxes, less 2.083% depreciation per month from the purchase date. This depreciation calculation provides a standardized method for determining the maximum liability. Franchisees should ensure their staff are well-trained on proper vehicle handling and maintenance procedures to mitigate these risks.

Acts of God, such as flood, hail, tornado, or hurricane, are exceptions where the Owning City may ask the Custodial City to file a claim if the Custodial City has coverage and is adding to an existing claim where the Custodial City's vehicles were also damaged. This highlights the importance of maintaining adequate insurance coverage to protect against potential liabilities.