Does Budget control exclusively any settlement arising out of any alleged infringement of its copyrighted works?
Budget Franchise · 2025 FDDAnswer from 2025 FDD Document
You must immediately notify Budget of any actual or apparent infringement of, or challenge to, any of the copyrighted works, or any person's claim of any rights in the copyrighted works. Budget may take any action (or no action) in response to these matters and control exclusively any settlement, litigation, arbitration, administrative, or other proceeding arising out of any alleged infringement, challenge, or claim or otherwise relating to the copyrighted works. Budget has no obligation to participate in your defense or indemnify you for damages or expenses you incur if you are a party to any proceeding involving the copyrighted work. If it becomes advisable at any time in Budget's judgment for you to modify or discontinue using any of the copyrighted works and/or for you to use one or more additional or substitute copyrighted or copyrightable items, you must comply with Budget's directions.
Source: Item 14 — PATENTS, COPYRIGHTS, AND PROPRIETARY INFORMATION (FDD pages 64–65)
What This Means (2025 FDD)
According to Budget's 2025 Franchise Disclosure Document, Budget maintains exclusive control over any settlement, litigation, arbitration, administrative, or other proceeding related to alleged infringements, challenges, or claims concerning its copyrighted works. This means that as a franchisee, you are required to immediately notify Budget of any potential copyright infringements or challenges. However, Budget has the sole discretion to decide what action, if any, to take in response.
This control extends to all aspects of legal proceedings, including settlements. Budget is not obligated to participate in a franchisee's defense or to cover any damages or expenses incurred if the franchisee becomes involved in a proceeding related to Budget's copyrighted works. Franchisees must comply with Budget's directions to modify or discontinue using any copyrighted works if Budget deems it necessary.
This arrangement is typical in franchising, where the franchisor protects its intellectual property. While Budget retains control over legal proceedings, the franchisee is responsible for notifying Budget of any potential issues. This ensures that Budget can take appropriate action to protect its copyrighted materials and brand reputation. However, franchisees should be aware that they may not have control over the outcome of any legal proceedings and may not be indemnified for related expenses.