How does Budget use the initial franchise fee paid by franchisees?
Budget Franchise · 2025 FDDAnswer from 2025 FDD Document
Budget will conduct such advertising and promotion, at its own expense, and in such manner and to such extent, as Budget sees fit in its sole discretion.
With respect to such advertising and promotion by Budget, Budget may expend the Monthly Marketing Fees (as required in Paragraph 7.4 and the Summary Pages (Section 10(d))) for advertising and promotion (including the development and operation of the Reservation System and the development of National Acco
Budget's expenditures (if any) will be intended to maximize recognition of the Marks and patronage of all Rental Businesses and may be used to support experimental or test programs and programs that, in the judgment of Budget, will enhance brand awareness.
Budget undertakes no obligation to ensure that its expenditures in or affecting any geographic area will be proportionate or equivalent to the License Fees or any other fees paid by licensees operating in that geographic area.
Budget does not guarantee that any licensee will benefit directly from Budget's advertising and promotion expenditures, nor does Budget guarantee the distribution of advertising in any quantity or format, to or for any particular licensee or licensees, or in any area, which includes a particular licensee's territory.
Budget will have no obligation to segregate any funds paid by Licensee to Budget which Budget plans to expend for advertising and promotion, nor will any such funds be deemed trust funds but rather will be deemed general funds of Budget.
Source: Item 23 — RECEIPTS (FDD pages 80–426)
What This Means (2025 FDD)
Based on the 2025 Budget Franchise Disclosure Document, Budget has the discretion to allocate funds from monthly marketing fees towards advertising and promotion efforts. These efforts are intended to enhance brand awareness and attract more customers to all Budget rental businesses. Budget may use these funds to support experimental programs or initiatives that it believes will improve brand recognition.
Budget is not obligated to ensure that advertising and promotion expenditures in any specific geographic area are proportional to the license fees or any other fees paid by franchisees in that area. This means that a franchisee's contribution to the marketing fund does not guarantee a corresponding level of advertising or promotional activity in their specific location.
Budget does not guarantee that any franchisee will directly benefit from its advertising and promotion expenditures. Additionally, Budget does not guarantee the distribution of advertising in any specific quantity or format to any particular franchisee or area. The funds paid by franchisees for advertising and promotion are considered general funds of Budget and are not segregated or treated as trust funds. This gives Budget significant flexibility in how it uses these funds to support the overall brand and network.