What is the choice of law for the Budget franchise agreement, subject to state law?
Budget Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section of the Budget License Agreement | Summary |
|---|---|---|
| q. Non-competition during the term of the franchise | 1.6 and Nondisclosure and Noncompetition Agreement | No involvement in other vehicle rental business or system in the United States. |
| r. Non-competition covenants after the franchise is terminated or expires | 11.9, 12.6, and Nondisclosure and Noncompetition Agreement | No competing business for one year in licensed territory or within five miles of licensed territory. |
| s. Modification of the agreement | 14.2(c) | Must be reduced to writing and signed by you and Budget. However, the Manual and Standards are subject to change. |
| t. Integration/merger clause | 14.2(a) | Only terms of license agreement, its exhibits, its schedules, the Standards and Transfer Requirements are enforceable. Any representations or promises outside of the disclosure document and license agreement may not be enforceable. Notwithstanding the foregoing, nothing in this or any related agreement is intended to disclaim the express representations made in the Franchise Disclosure Document, its exhibits and amendments. |
| u. Dispute resolution by | None | |
| arbitration or mediation | ||
| v. Choice of forum | 14.9 | Subject to state law, you agree to the jurisdiction of New Jersey courts. |
| w. Choice of law | 14.8 | Subject to state law, New Jersey law applies. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION (FDD pages 66–70)
What This Means (2025 FDD)
According to Budget's 2025 Franchise Disclosure Document, the franchise agreement is governed by New Jersey law, but this is subject to state law. This means that while the agreement itself is generally interpreted under New Jersey law, if any provision conflicts with the laws of the state where the franchisee operates, the state law will take precedence. This is a fairly standard clause in franchise agreements, as it allows for a uniform agreement while still respecting the regulatory authority of individual states. Franchisees should be aware of this clause and understand that certain aspects of their franchise agreement may be interpreted differently based on their location. It is important to consult with a legal professional to understand how both New Jersey law and the laws of their specific state apply to their Budget franchise agreement.