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B67/100FDD 2024
Budget Rent A Car — Litigation & Risk
Automotive - Repair & Service · FDD Items 3, 4 & 5
Elevated Risk
15 cases disclosed in FDD Items 3 and 4.
Source: FDD Items 3–5
FDD Items 3 & 4
Litigation Metrics
Cases disclosed
15
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
67 / 100
FranchiseVerdict composite
Rating
MODERATE
STRONG / MODERATE / CAUTION / AVOID
7(a) FOIA data · FY2020–present
SBA Loan Performance
Aggregated from public SBA 7(a) loan disclosures. Default rate is the share of loans that were charged off or settled for less than the full balance.
Total 7(a) loans
5
Government-backed loans issued
Default rate
20.0%
vs <3% typical · system-wide
5-yr default rate
0.0%
Defaults
1 loans
Loans charged off or defaulted
Total loan volume
$1.7M
Avg loan size
$344K
Participating lenders
5
FDD Items 5, 6 & 17 — what you give up
Contract Risk Indicators
Mandatory arbitration
Not required
You retain the right to sue in court
Jury trial waiver
Waived
You give up the right to a jury trial
Non-compete
1 yrs
Post-termination restriction on similar businesses
Franchisor can compete
Yes
Franchisor can open competing locations in or near your territory
Right of first refusal
Yes
Franchisor can match any purchase offer when you try to sell
Governing law
New Jersey
State whose law governs disputes — relevant if you're not based there
What drove the 67/100 rating
Risk Score Breakdown
- 01MINORDeclining unit count (-6.8% YoY) signals system contraction and reduced franchisee support infrastructure
- 02HIGHMultiple pending class actions for consumer fraud and deceptive practices indicate systemic operational or marketing issues
- 03MINORTwo FTC consent orders on fuel charges and damage disclosure suggest repeated regulatory violations and compliance failures
- 04MINORNo Item 19 financial performance disclosure prevents validation of claimed profitability and revenue potential
- 05MINORHigh initial investment ($605K-$1.57M) combined with 7.5% royalty creates significant fixed cost burden with unproven returns
- 06HIGHLabor law litigation and contractor misclassification claims suggest HR/compliance risk for franchisees
- 07MINORShrinking system with declining units reduces brand value, reservation volume, and corporate support resources
Severity inferred from FDD text — not a regulatory or legal classification
Litigation data from FDD Items 3, 4, and 5. SBA data from public 7(a) FOIA records (FY2020–present). Not legal advice — consult a franchise attorney before signing any franchise agreement.