Does the Budget definition of 'transfer' only apply during the term of the Transferring Licensee's License Agreement?
Budget Franchise · 2025 FDDAnswer from 2025 FDD Document
"Transfer" is defined as any transfer, sale, assignment, management agreement or other agreement of any kind, at any time during the term of the Transferring Licensee's License Agreement, and in accord with the provisions thereof, which directly or indirectly results in a change in the beneficial ownership or control of the Licensee, the Rental Business, the Budget franchise, or the identity of the parties dealing with Budget on either an ownership or operational level.
Source: Item 23 — RECEIPTS (FDD pages 80–426)
What This Means (2025 FDD)
According to Budget's 2025 Franchise Disclosure Document, the definition of "transfer" applies specifically during the term of the Transferring Licensee's License Agreement. The FDD defines a transfer as any agreement that results in a change of ownership or control of the Licensee, the Rental Business, the Budget franchise, or the parties dealing with Budget.
This definition encompasses a broad range of transactions, including sales, assignments, management agreements, or any other agreement that alters the beneficial ownership or operational control of the Budget franchise. It is important to note that this definition is explicitly tied to the duration of the Transferring Licensee's License Agreement, meaning it applies only while the agreement is in effect.
For a prospective Budget franchisee, this means that any change in ownership or control during the term of their agreement will be subject to Budget's approval and transfer requirements. After the agreement expires, these transfer restrictions may no longer apply, although other obligations might persist depending on the terms of the agreement and applicable laws. It is crucial for franchisees to understand these transfer conditions to ensure compliance and avoid potential breaches of the agreement.