When Budget assigns the contract, what requirements must the assignee meet?
Budget Franchise · 2025 FDDAnswer from 2025 FDD Document
The "Summary" section of Item 17(j), entitled Assignment of contract by Budget, in the Budget License Agreement chart of Item 17 is amended by adding the following:
"However, to the extent required by applicable law, no assignment will be made except to an assignee who, in Budget's good faith and judgment, is willing and able to assume Budget's obligations under the License Agreement."
Source: Item 23 — RECEIPTS (FDD pages 80–426)
What This Means (2025 FDD)
According to Budget's 2025 Franchise Disclosure Document, Budget has the right to transfer and assign the License Agreement to another party. The assignee must be willing and able to assume Budget's obligations under the License Agreement. This requirement is subject to applicable law and is based on Budget's good faith and judgment.
For a prospective franchisee, this means that while Budget can transfer the agreement, the assignee must be capable of fulfilling Budget's responsibilities. This clause protects the franchisee to some extent, ensuring that the new party is committed and able to maintain the standards and obligations of the franchise agreement.
It is important for a potential franchisee to understand the conditions under which Budget might assign the agreement and to assess the financial and operational capabilities of any potential assignee. This ensures the continuity and quality of the Budget franchise operations.