What is the definition of "Budget Indemnified Parties" according to the Budget franchise agreement?
Budget Franchise · 2025 FDDAnswer from 2025 FDD Document
Licensee will indemnify and hold harmless Budget and the Related Entities and their respective officers, directors, employees, affiliates, agents, successors and assigns (collectively, "Budget Indemnified Parties") against any and all liabilities, claims, demands, causes of action, damages, costs, expenses and amounts of any type whatsoever, including environmental claims, whether expended in settlement, in attorneys' fees, or however expended or disbursed, which arise directly or indirectly from, as a result of, or in connection with Licensee's
operation of the Rental Business, or in Licensee's dealings with third parties concerning said Rental Business, this Agreement, the System, or the Marks. In addition, Licensee will, at Budget's request, defend, at Licensee's expense, Budget and the other Budget Indemnified Parties against such claims, demands and causes of action; provided, however, that Licensee will relinquish such defense to Budget immediately upon Budget's request, although Licensee will remain obligated to pay Budget's and the other Budget Indemnified Parties' defense costs (but Licensee shall not be liable for the expenses of more than one law firm representing such Budget Indemnified Parties unless there is a conflict of interest.) and any settlements entered into by Budget and the other Budget Indemnified Parties at their discretion. In no event may Licensee enter into any settlement of any such claim on behalf of an Budget Indemnified Party without Budget's prior written approval.
Source: Item 23 — RECEIPTS (FDD pages 80–426)
What This Means (2025 FDD)
According to Budget's 2025 Franchise Disclosure Document, "Budget Indemnified Parties" is defined within the context of indemnification. The franchise agreement specifies that the franchisee is responsible for protecting Budget and related entities from liabilities, claims, and expenses arising from the franchisee's operation of the rental business.
Specifically, the "Budget Indemnified Parties" include Budget itself, its related entities, and their respective officers, directors, employees, affiliates, agents, successors, and assigns. This means that a wide range of individuals and organizations connected to Budget are protected under the indemnification clause.
This definition is important for prospective franchisees because it clarifies the scope of their responsibility to indemnify Budget. Franchisees must be aware that they are potentially liable for a broad range of claims and expenses that may arise from their business operations, and they are responsible for defending Budget and the other Budget Indemnified Parties against such claims. This could include costs related to legal defense, settlements, and other expenses, highlighting the importance of adequate insurance coverage and sound business practices.