What accuracy standards does Budget require for materials submitted by the Transferee, its shareholders, and/or partners during a transfer?
Budget Franchise · 2025 FDDAnswer from 2025 FDD Document
Transferring Licensee will submit to Budget written notice of its intent to transfer, together with all of the following documents and information for Budget's review, with such documents and information being certified as true, correct and complete by Transferee, its shareholders, members and/or partner(s):
Source: Item 23 — RECEIPTS (FDD pages 80–426)
What This Means (2025 FDD)
According to Budget's 2025 Franchise Disclosure Document, when a Licensee intends to transfer their license, Budget requires that all documents and information submitted for review by the Transferee, its shareholders, members, or partners must be certified as true, correct, and complete. This requirement applies to a range of documents, including the names, addresses, and phone numbers of the Transferee and its management team, financial statements for the past three years, business experience for the past five years, bankruptcy and litigation history for the past five years, copies of the buy/sell agreement, verification of secured lines of credit for fleet financing, verification of fleet liability insurance, and pro forma financial statements.
For stock offerings, Budget also requires that the materials submitted for the offering, as required by federal or state law, and all materials used in any exempt offering, be certified as true, correct, and complete. Budget's consideration for approval of any transfer is based on its judgment of whether the proposed transfer will enhance or impair the rights and obligations between Budget and the Licensee, as well as the overall benefit or detriment to the network.
Budget also considers the accuracy and completeness of the representations and factual statements contained in the stock offering prospectus and other documents concerning the Transferring Licensee's relationship with Budget, as well as the accuracy and completeness of any necessary disclosures in the stock offering prospectus and other documents concerning Budget's rights of approval and Budget's option to purchase with respect to the initial and any subsequent transfer of the stock. This places a significant responsibility on the Transferee and related parties to ensure the information provided is accurate and thorough, as any misrepresentation could impact the transfer approval.