According to the Budget guarantee, how is the guarantee to be interpreted and construed?

According to Budget's 2025 Franchise Disclosure Document, the guarantee provided by the guarantors will be interpreted and construed in accordance with the applicable law and dispute resolution provisions outlined in Article XIV of the franchise agreement. This means that any legal disputes or questions regarding the interpretation of the guarantee will be resolved according to the laws governing the agreement, and as detailed in Article XIV. In these instances, the term 'Licensee' will be deemed to refer to 'Guarantor'.

This clause ensures that the guarantee is legally sound and enforceable, providing clarity on how disputes related to the guarantee will be handled. For a prospective Budget franchisee, this means understanding Article XIV is crucial, as it dictates the legal framework for resolving any guarantee-related issues. It also means that the guarantor is subject to the same dispute resolution process as the franchisee ('Licensee') under Article XIV.

This approach is fairly standard in franchising, as it provides a clear and predictable legal framework. Franchise agreements typically specify the governing law and dispute resolution methods to avoid uncertainty and ensure consistent interpretation of the agreement. A prospective Budget franchisee should carefully review Article XIV to understand their rights and obligations, as well as the process for resolving any disputes related to the guarantee.