What constitutes 'cause' for Budget to terminate the agreement with prior notice?
Budget Franchise · 2025 FDDAnswer from 2025 FDD Document
Agreement if less than one year), then in lieu of the License Fees otherwise payable for the remainder of the one hundred eighty (180) day period, Licensee will pay Budget the Termination Fee. The "Termination Fee" shall equal: (i) six (6) times the amount of the average License Fees, which were payable by Licensee hereunder for the immediately preceding one (1) year period (or during the term of this Agreement if less than one year); multiplied by (ii) a fraction, the numerator of which is the number of days between the occurrence of the event (a) above and the end of the one hundred eighty (180) day period, and the denominator of which is one hundred eighty (180). Licensee's obligation to pay the foregoing amount will not in any way affect any other rights or remedies of Budget arising under this Agreement or otherwise.
- 11.3 Termination By Budget With Prior Notice. Budget will have the right to terminate this Agreement for cause. In addition to the grounds described in Paragraph 11.4, cause for termination will be Licensee's failure to reasonably adhere to any provision of this Agreement, including the Standards, and to cure any such failure within the notice period hereinafter prescribed. Budget will not be limited to the reasons set forth in any notice of default or similar notice issued by Budget in any judicial proceeding in which the validity of the termination of this Agreement is at issue.
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 terminate the agreement with prior notice if there is cause. Cause for termination includes the franchisee's failure to reasonably adhere to any provision of the agreement, including the standards.
Budget will provide a notice of default specifying a time period to cure the failure. For failure to pay any sums owed to Budget, the franchisee has fifteen (15) days from the date of delivery of notice to cure the failure. For failure to adhere to any other provision of the agreement or the standards, the franchisee has thirty (30) days from delivery to cure the failure, unless otherwise set forth in Paragraph 11.4.
If the franchisee fails to cure the failure within the prescribed time period, the agreement will terminate without further notice or action by Budget upon expiration of the prescribed time period. Budget is not limited to the reasons set forth in any notice of default in any judicial proceeding regarding the validity of the termination.