Under what circumstances must a Budget franchisee adhere to rental rates set by Budget?
Budget Franchise · 2025 FDDAnswer from 2025 FDD Document
To the maximum extent permitted by law, you must comply with, and adhere to, any rental rates Budget sets (including complying with and adhering to maximum rates Budget establishes).
If Budget does not set rental rates, but you communicate to Budget your decision to adhere to Budget's suggested rental rates, then you must honor those rates.
You also must honor rental rates that Budget periodically establishes under the Corporate Rate Program, with regard to National Accounts, as such accounts are designated by Budget from time to time.
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING (FDD pages 37–61)
What This Means (2025 FDD)
According to Budget's 2025 Franchise Disclosure Document, a franchisee must adhere to rental rates under specific conditions. To the maximum extent permitted by law, a Budget franchisee must comply with and adhere to any rental rates that Budget sets, including maximum rates. If Budget does not set rates, but the franchisee communicates a decision to adhere to Budget's suggested rates, then the franchisee must honor those rates.
Additionally, Budget franchisees must honor rental rates that Budget periodically establishes under the Corporate Rate Program with regard to National Accounts, as designated by Budget. This means Budget has the authority to dictate pricing under certain circumstances, particularly with national corporate clients.
This requirement ensures consistency in pricing for national accounts and when Budget explicitly sets or suggests rates. However, it also means franchisees have limited control over pricing in those situations, which could impact profitability depending on local market conditions and operating costs. Franchisees need to understand these conditions and their potential impact on their business when deciding to invest in a Budget franchise.