What circumstances will NOT affect the guarantor's obligations under the Budget guarantee?
Budget Franchise · 2025 FDDAnswer from 2025 FDD Document
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- The obligations of the Guarantors hereunder will not be affected by any act, omission or circumstances which but for this Guarantee might operate to release or otherwise exonerate the Guarantors from their obligations hereunder or affect such obligations, including, without limitation and whether or not known to the Guarantors, Budget or Licensee:
(a) Any time, indulgence or concession granted to or with Licensee or any other person; or
(b) The taking, variation, compromise, renewal or refusal or neglect to perfect or enforce any rights, remedies or securities against or granted by Licensee or any other person; or
(c) Any variation or extension of the due date for performance of any obligation of Licensee referred to herein, to the extent that the Guarantors' obligations hereunder will apply to such term as varied or in respect of the extended due date; or
(d) Any irregularity, unenforceability or invalidity of any obligation of Licensee referred to in Paragraph 1 or any present or future law or order of any government or authority purporting to reduce or otherwise affect any such obligation; or
(e) The death or insolvency of the Licensee or any Guarantor; or
(f) Any security held or taken at any time by Budget being void, defective, or informal; or
(g) Budget entering into any deed of priority or postponement in relation to any security held or taken at any time by Budget; or
(h) Any modification or addition to, or termination of the obligation of Licensee referred to in Paragraph 1.
Source: Item 23 — RECEIPTS (FDD pages 80–426)
What This Means (2025 FDD)
According to Budget's 2025 Franchise Disclosure Document, several circumstances will not affect the obligations of the guarantors under the guarantee. These include any time, indulgence, or concession granted to the licensee or any other person, as well as the taking, variation, compromise, renewal, or refusal to perfect or enforce any rights, remedies, or securities against the licensee or any other person. This means that even if Budget provides some leeway or makes adjustments to the agreement with the franchisee, the guarantor's responsibility remains intact.
Furthermore, the guarantor's obligations remain even with any variation or extension of the due date for performance of any obligation of the licensee. The obligations are also not affected by any irregularity, unenforceability, or invalidity of any obligation of the licensee, or any present or future law or order of any government or authority purporting to reduce or otherwise affect any such obligation. This protects Budget in case some aspect of the agreement becomes legally problematic; the guarantor is still responsible.
Finally, the death or insolvency of the licensee or any guarantor, any security held by Budget being void, defective, or informal, Budget entering into any deed of priority or postponement in relation to any security held by Budget, or any modification or addition to, or termination of, the obligation of the licensee will not impact the guarantor's obligations. This comprehensive list underscores the strength and breadth of the guarantee, ensuring Budget is protected in a wide array of potential scenarios. Prospective franchisees should be aware that securing a guarantee for a Budget franchise entails significant and unwavering financial responsibility for the guarantor.