Under what conditions does Budget reserve the right to reject a licensee's commission submission?
Budget Franchise · 2025 FDDAnswer from 2025 FDD Document
Budget has established a centralized system of paying travel agents and other groups as a result of referral business to Licensees.
Licensee will reimburse Budget for amounts paid to travel agents or other groups on Licensee's behalf, including abiding by the terms of such credit and other programs such as frequent flyer, frequent renter or other travel incentive programs, which Budget may designate.
Licensee will display any promotional programs, including special suggested rate promotions as a result of agreements Budget enters into with National Accounts.
Licensee must provide service to the National Accounts in accordance with Budget's requirements.
If Licensee fails to do so, in addition to other remedies available to Budget under this Agreement, Budget will have the right, without notice to Licensee, to provide (or license a third party, including a Related Entity, to provide) service to one or more National Accounts in the Territory.
Source: Item 23 — RECEIPTS (FDD pages 80–426)
What This Means (2025 FDD)
According to Budget's 2025 Franchise Disclosure Document, Budget has established a centralized system for paying travel agents and other groups for referral business to its licensees. As part of this system, Budget outlines specific conditions under which it may take action related to commissions. If a Budget licensee fails to provide service to National Accounts according to Budget's requirements, Budget has the right to provide service to those National Accounts directly or through a third party, including a related entity, without notice to the licensee. This implies that Budget may not pay the licensee the commission for that business.
Furthermore, the licensee is responsible for reimbursing Budget for amounts paid to travel agents or other groups on the licensee's behalf. This includes abiding by the terms of credit and other programs like frequent flyer, frequent renter, or other travel incentive programs designated by Budget. The licensee must also display any promotional programs, including special suggested rate promotions, resulting from agreements Budget enters into with National Accounts.
In cases where the licensee defaults on any term or provision of the agreement and fails to correct the default within thirty days of receiving written notice from ABCR, Budget has the right to terminate services, including those related to reservations and the Reservation System. This termination can occur without any obligation to provide a written notice of termination to the licensee. Upon termination, ABCR may discontinue all services, including the solicitation, reception, and transmission of reservations on behalf of the licensee. These stipulations ensure Budget's control over service quality and adherence to program terms, while also protecting its relationships with National Accounts and travel partners.